The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The income tax regime in relation to property businesses changed with effect from 2017/18 onwards with the introduction of the statutory simplified cash basis.
This guidance note summarises when the simplified cash basis can be used for property businesses, the treatment of common property income and expenses and the restrictions as to how property losses can be relieved. However, the legislation is complicated and, therefore, before advising clients, it is advisable to consider the statutory provisions carefully in relation to the client’s circumstances. For further reading, see Simon’s Taxes B6.202C–B6.202E.
For ease of reference, the alternative to the simplified cash basis is referred to as the ‘accruals basis’ in this guidance note, although of course this means the basis under which both generally accepted accounting practice (GAAP) and standard tax provisions apply. For discussion of these rules, see the Taxation of property income for individuals and Allowable expenses for property businesses guidance notes.
The simplified cash basis for property businesses is the default method of calculating property income so the simplified cash basis must be used unless any of the following conditions apply:
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