Share this content

Rent. Property Income or Trade

I have inherited a new client (Partnership). They own a large office building which they use one floor for their business (Printing) and rent out the remaing floors. Rental Income amounts to approx £80k per annum. The previous accountants have included this as trade income. As the renting is not a temporary let of surplus space but an ongoing arrangement I believe this should be taxed as Property Income. Would others agree?


Please login or register to join the discussion.

09th Jan 2012 15:50

yes it should be taxed as prop income

tho it would be fine to show it in the partnership accounts, obviously if the P is making a loss then loss relief may have been incorrectly claimed - one also presumes that ther is an agrement between the registered owner and the P. its not an LLP?

Thanks (0)
By thacca
09th Jan 2012 16:09

National Insurance

The accounts I have seen, previous two years and the draft for this year show profits roughly equal to the rental income of around £80k. Therefore stripping out the rent the trade is breaking even. The last tax return I have seen has included rent in trading profits. I am thinking there is an opportunity here to resubmit tax returns for previous years and reclaim national insurance paid on misclasification of rents as trade profits.

Thanks (0)
09th Jan 2012 16:21

yes but

you cannot claim any loss on the trade against the property income and you are limited in your deductions from property income , incidentally has 10% wear and tear been deducted

Thanks (0)
By blok
09th Jan 2012 16:23


why wont they be able to offset the trade loss against the property income?

Thanks (0)