Accruals basis

Produced by Tolley
Accruals basis

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

  • Accruals basis
  • Outline
  • Corporation tax periods of account

Outline

The calculation of the profits of the rental income business should be in accordance with generally accepted accounting practice (GAAP), subject only to adjustments required by tax legislation. Specifically, the income and expenditure should be calculated on an accruals basis.

Calculating the rental income in accordance with GAAP will mean, in particular, that any rent-free periods will be dealt with by calculating the total rent due for the life of the lease (or until the first rent review) and then dividing this equally between the term. This can mean that in the initial rent-free period the lan

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