Under the Income Tax (Trading and Other Income) Act 2005, there is an explicit connection between the rules applicable for calculating taxable trading profits and determining taxable property business profits (for both UK and overseas property), with particular computational rules being applied and disapplied as appropriate.

Accruals or cash basis

For 2017-18 and subsequent tax years, the rules for calculating profits of a property business, for income tax, diverge in some respects, depending on whether those profits fall to be calculated on the accruals (or GAAP) basis, or (for 2017-18 and later years) the statutory ‘cash basis’. There are two aspects here:

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