The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Profits and losses of a UK property business are computed on broadly the same basis as trading profits and losses. The rule that expenditure must be ‘wholly and exclusively’ for the business applies accordingly. For further guidance on the general principles of computing trading profits and losses, see the Trading income – general principles guidance note.
This guidance note gives details of certain specific types of expenditure which are of most relevant to UK property businesses.
Allowed as a deduction, provided the debt is:
See also the Bad debts guidance note.
If there's any unpaid employee remuneration accrued for and which would normally be allowed, this must be paid within nine months of the end of the period of account, otherwise a deduction won't be allowed until it is actually paid. See the Employee remuneration guidance note for further guidance.
If the property investor wishes to establish an EBT the same restrictions as for trading businesses apply. Broadly speaking the legislation seeks to allow a deduction for a payment into an EBT only to the extent that there's a matching payment out from the EBT that is therefore taxable on the employee.
Pre-trading expenditure is also allowed provided:
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