The following Tax Q&A provides comprehensive and up to date legal information covering:
In this Q&A we assume that the owner of the property is a non-UK resident individual and is not calculating trade profits on the cash basis.
For details of how a person is taxed on UK property income generally, see Practice Notes: Property income—the income tax charge and Non-resident landlords scheme.
As explained in those Practice Notes, the profits of a property business are calculated in broadly the same way as the profits of a trade. Certain core rules relating to the calculation of trading profits are incorporated into the property income rules, including:
the calculation of profits in accordance with generally accepted accounting practice (GAAP)
the exclusion of receipts or expenses of a capital nature (including expenditure incidental to capital expenditure), and
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