Property income—the corporation tax charge
Property income—the corporation tax charge

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Property income—the corporation tax charge
  • What is the basis of the corporation tax charge on property income?
  • Calculation principles for property income
  • What is a property business?
  • The meaning of generating income from land
  • Specific inclusions within a property business
  • Specific exclusions from a property business
  • Difficult dividing lines between property business and trade
  • Territorial scope of corporation tax charge on property income
  • UK resident companies
  • More...

The charge to UK corporation tax applies to the profits of both UK and overseas property business.

A property business is one that generates income from land and includes every transaction entered into for that purpose.

A UK resident company is subject to corporation tax on the profits of both UK and overseas property businesses (save for any profits that are excluded under the foreign permanent establishments exemption).

A non-UK resident company is not, prior to 6 April 2020, generally subject to corporation tax on its UK property business, but may be subject to UK income tax under the non-resident landlords scheme. From 6 April 2020, a non-UK resident company is subject to corporation tax on its UK property business and UK property income.

Specific rules apply to the commercial letting of furnished holiday accommodation. These rules historically provided significantly more generous loss (and other) reliefs for furnished holiday letting than for other property businesses. However, the more generous loss relief has been restricted since 1 April 2011. The detail of these rules is outside the scope of this Practice Note.

For details of the income tax charge on property business, see Practice Note: Property income—the income tax charge

What is the basis of the corporation tax charge on property income?

As explained in The charge to corporation tax on income each type of taxable income is only brought into charge

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