Post-cessation receipts and expenses of a property business

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Post-cessation receipts and expenses of a property business
  • Cessation of a property business
  • Post-cessation receipts
  • Post-cessation expenses
  • Cap on unlimited income tax reliefs

For income tax purposes, rental profits from land and buildings are categorised as either:

  • a UK property business, or
  • an overseas property business, see the Overseas property businesses guidance note

England, Wales, Scotland and Northern Ireland make up the countries of the UK. The Isle of Man and the Channel Islands are treated as overseas for the purposes of the legislation.

This means that UK rental profits are pooled together and reported as one business, and overseas rental profits are pooled together and reported as one business.

The exceptions to this are:

  • furnished holiday lettings which are calculated and reported separately, see the Furnished holiday lets guidance note
  • properties let at an uncommercial rent, as the expenses are limited to the amount of the rent, see the Allowable property expenses guidance note

UK property businesses are considered further in the Property income guidance note.

Cessation of a property business

The date of cessation of a property business is a question of fact.

As a UK property business is a pool of all the taxpayer’s income-generating property in the UK, the date of cessation of a property business is usually when the final UK property is sold.

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So if, for example, the taxpayer owned five UK properties which were rented out, even if four of these properties were sold, the UK property business would continue until the sale of the final property.

Alternatively, the property business could cease when all the properties are used for non-business purposes, for example the business consists of one property and, after the tenant leaves, the owner moves into the

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