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Property income

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Property income

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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It is common for trustees to receive rental income from properties held as investments.

In general, the same tax principles of property businesses apply to persons, whether they are individuals, trustees or personal representatives, but there are some differences. These principles, and the exceptions which apply to trustees, are discussed below.

Type of property business

For income tax purposes, rental profits from land and buildings are categorised as either:

  1. a UK property business, or

  2. an overseas property business (see the Overseas property business for individuals guidance note)

ITTOIA 2005, ss 264–265

England, Wales, Scotland and Northern Ireland make up the countries of the UK. The Isle of Man and the Channel Islands are treated as overseas for the purposes of the legislation.

This means that UK rental profits are pooled together and reported as one business and overseas rental profits are pooled together and reported as one business.

The exceptions to this are:

  1. furnished holiday lettings (FHL) which are calculated and reported separately (although it should be noted that the furnished

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