HMRC’s manual explains the different types of treatment of rents related to a trade or profession. The guidance makes it clear that a trade or profession may include rents from temporarily surplus trading or professional accommodation in the trading or professional profit or loss computation.

This can only be done in the following circumstances:

• the accommodation must be temporarily surplus to current business requirements,
• the premises must be used partly for the business and partly let; in other words, rents from a separate property which is wholly surplus must be dealt with as property income,
• the rental income must be comparatively small (since otherwise, the tax liability resulting may not approximate to the strict statutory liability),
• the rents must be in respect of the letting of surplus business accommodation only and not of land.

Likewise, any expenditure on the surplus accommodation must be deducted from the trading or professional profit or loss computation.

Source: New feed