Trading income priority rules

There is specific tax legislation that seeks to determine which charge takes priority where two different charges could potentially apply to the same income. These rules are known as the 'priority rules'.

HMRC manuals state that for Income Tax purposes, savings and investment income, and income otherwise within one of the charges on miscellaneous income, which also falls to be treated as a trade receipt is dealt with under the trading income rules. For Corporation Tax purposes, distributions from unauthorised unit trusts and income from the sale of foreign dividend coupons, which are also trade receipts, are dealt with under the trading income rules.

There are a number of exceptions to these rules. For example, a receipt or other credit item which would otherwise be treated both as a trade receipt and as a receipt of a UK property business is dealt with under the property income provisions.

The Income Tax priority rules must be considered together with other rules of law about the scope of particular provisions or the order of priority to be given to them. For example, there are particular rules which expressly require certain activities to be treated as a trade.

Posted in HMRC notices

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login: Onvio

Forgot Password?

Latest News

Immigration rights of EEA citizens in the event of a no-deal Brexit

The Government has now announced the revised transitional arrangements that will apply in the event of a no-deal Brexit to …
Read More

Duty-free shopping to make a comeback?

The Chancellor of the Exchequer Sajid Javid has said that the Government will reintroduce duty-free shopping with EU countries in …
Read More

Claiming Entrepreneurs’ relief

Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a …
Read More

Twitter Feed