6.6.1 Profits recognised in accordance with GAAP principles

The profits of a business are measured over a period of time during which receipts and expenses are brought into account:

Individual landlords are taxed on ‘the full amount of the profits arising in the tax year’ (ITTOIA 2005, s. 270(1)). For income tax purposes, the tax year starts on 6 April and ends on the following 5 April (ITA 2007, s. 4, 989).

Corporate landlords are assessed to corporation tax by reference to the company’s accounting period. Corporation tax is payable on ‘the full amount of profits arising in the accounting period’ (CTA 2009, s. 8(3)).

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