Illustration - UK property income

In this lesson

1. 0:00 Sunlight Limited tax adjustment illustration
2. 0:34 Property income accruals basis calculation
3. 1:42 Trade profit adjustment and add-backs
4. 2:16 Property income and insurance workings
5. 3:05 Final TTP calculation and answer

About this lesson

You'll work through a practical illustration involving rental income adjustments, capital allowance add-backs, and apportioned insurance costs—essential skills for the TX paper. This step-by-step approach shows you how to handle timing differences between cash receipts and accounting periods, and which expenses qualify as deductible trade costs versus property-related deductions. The worked example takes you through the key adjustments: adding back depreciation and non-deductible lease payments to calculate trade profit, then separately computing UK property income by identifying which rental payments and insurance costs fall within your accounting year. You'll see how to apportion payments that straddle your year-end, and understand why the accruals basis matters for getting the right tax position. By the end, you'll be confident handling multi-period rental arrangements and mixed expense deductions in your own exam questions.

Duration: 3m