Paragraph 17
After section 272 insert—
“Application of trading income rules: cash basis
272ZA(1)In relation to a property business whose profits are calculated on the cash basis, the provisions of Part 2 (trading income) which apply as a result of section 271E(1) are limited to the following—
“
In Chapter 3 (basic rules)— section 26 losses calculated on same basis as profits section 28A money's worth section 29 interest In Chapter 4 (rules restricting deductions)— section 34 expenses not wholly and exclusively for trade and unconnected losses sections 38 to 42 and 44 employee benefit contributions sections 45 to 47 business entertainment and gifts section 52 exclusion of double relief for interest section 53 social security contributions section 54 penalties, interest and VAT surcharges section 55 crime-related payments section 55A expenditure on integral features In Chapter 5 (rules allowing deductions)— section 57 pre-trading expenses sections 58 and 59 incidental costs of obtaining finance section 69 payments for restrictive undertakings sections 70 and 71 seconded employees section 72 payroll deduction schemes: contributions to agents' expenses sections 73 to 75 counselling and retraining expenses sections 76 to 80 redundancy payments etc section 81 personal security expenses sections 82 to 86 contributions to local enterprise organisations or urban regeneration companies sections 86A and 86B contributions to flood and coastal erosion risk management projects sections 87 and 88 scientific research sections 89 and 90 expenses connected with patents, designs and trade marks section 91 payments to Export Credits Guarantee Department In Chapter 6 (receipts)— section 96 capital receipts section 97 debts incurred and later released section 104 distribution of assets of mutual concerns section 105(1) and (2)(b) and (c) industrial development grants section 106 sums recovered under insurance policies etc In Chapter 6A (amounts not reflecting commercial transactions)— section 106C amounts not reflecting commercial transactions section 106D capital receipts section 106E gifts to charities etc In Chapter 7 (gifts to charities etc)— section 109 receipt by donor or connected person of benefit attributable to certain gifts ”
(2)In those provisions, the expression “this Part” is to be read as a reference to those provisions as applied by subsection (1) and to the other provisions of Part 3.
(3)In section 106D, the reference to subsection (4) or (5) of section 96A is to be read as a reference to subsection (2), (3) or (5) of section 307F (deemed capital receipts under, or after leaving, cash basis).”