Income Tax (Trading and Other Income) Act 2005 section 617

Deductions in calculating certain income charged

Section 617 sets out the rules for deducting expenses when calculating income charged under this chapter, other than annual payments, particularly where the taxpayer provides services that do not amount to a trade.

• Expenses are deductible only if they are wholly and exclusively incurred for the purpose of generating the income, though where an expense serves more than one purpose, an identifiable part or proportion attributable solely to generating the income may still be deducted.
• Certain rules that apply to the calculation of trading profits also apply here, specifically the treatment of expenditure, receipts, and revaluation credits or debits relating to relevant telecommunication rights.
• Expenses that would not be allowable as deductions in calculating trading profits, or that already receive relief under any other provision of the Income Tax Acts, cannot be deducted under this section.
• The frequency with which payments are made is irrelevant in determining whether they are annual payments for the purposes of this chapter.