Land (and other property) income - L7 Flashcards
lecture 7 (23 cards)
What does s. 268 ITTOIA 2005 state?
Income tax is charged on the profits of a property business.
What is included under a “property business” in s. 264 ITTOIA 2005?
Income from land, including casual or one-off transactions.
Can buying and reselling land fall under land income?
No, resale is usually capital gain or trade income if done as a business.
What does s. 266 ITTOIA 2005 cover?
Income from exploiting any interest in land, including renting.
Does “land” include buildings?
Yes, under the Interpretation Act 1978.
How is furniture in furnished lettings treated under s. 308 ITTOIA 2005?
Usually taxed as land income unless it’s part of a separate furniture-rental trade.
How does HMRC generally treat furnished lettings?
As wholly land income (PIM1058), rarely separating furniture provision.
Are services provided with land rental taxed as land or trade income?
Typically land income unless non-standard services are separately charged (PIM4300).
What does s. 267 ITTOIA 2005 do?
Lists exceptions to the land income charge—referring to ss. 9, 10, 12.
What is the tax treatment of farming under s. 9 ITTOIA 2005?
Farming and market gardening are treated as trades, not land income.
What is the effect of s. 10 ITTOIA 2005?
Commercial occupation of land is trade income.
What must a taxpayer show to fall under s. 10 ITTOIA?
Actual occupation of the land (Webb v Conelee Properties).
How is a lease treated for land income purposes?
Always land income as the landlord cannot be in occupation.
Can granting licences be trade income?
Yes, if the taxpayer remains in actual occupation while granting them.
What is Rent-a-Room Relief under Part 7 Ch.1 ITTOIA 2005?
Tax-free rental of furnished accommodation in your home up to £7,500/year.
What happens if rent exceeds the Rent-a-Room limit?
The taxpayer can be taxed only on the amount above £7,500, with no deductions.
What is covered by s. 19 ITTOIA 2005?
Renting out tied premises (e.g., a pub) to sell the taxpayer’s goods is trade income.
What option does s. 20 ITTOIA 2005 provide?
Traders operating caravan sites may opt to treat income as trade income.
What does s. 21 ITTOIA 2005 allow?
Optional trade treatment for modest receipts from temporary surplus business space.
What is changing in April 2025 regarding holiday lettings?
Special tax rules for furnished holiday lettings will be abolished.
What types of income fall under Part 4 ITTOIA 2005?
Savings and investment income, mainly interest and dividends.
What does s. 369 ITTOIA 2005 cover?
Charges income tax on interest.
What does s. 383 ITTOIA 2005 cover?
Charges income tax on dividends and distributions of UK companies.
