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Online IR4 2004

Help IR4 2004 - Other income

Show at Question 20 any other income received by the company, for example, the sale of:

  • land and/or buildings
  • shares or other property
  • securities
  • income from an undertaking or scheme.

The following notes explain what you need to do if the company received any of the types of income listed above.

Income from sale of land and/ or buildings

The profits are taxable if the company bought a property for the purpose of reselling it, or is in the business of buying and selling land and/ or buildings.

The profits may be taxable if the company:

  • is a building company and improved a property before selling it
  • developed or subdivided land and sold sections, or
  • had a change of zoning on company property and sold it within ten years of buying it.

Print the total profit in Box 20B. Write the details of the income and expenses from these sales on a sheet of paper and send it to us.

If you're not sure if the income from the sale of land or buildings is taxable, please phone us.

Income from sale of shares or other property

Profits from the sale of shares and other property are taxable if the company:

  • buys and sells shares or other property as a business, or
  • buys shares or other property for the purpose of resale.

Include the total profit in Box 20B. Write the details of the income and expenses from these sales on a sheet of paper and send it to us.

Losses from sale of land, buildings, shares or other property

If the company has made a loss and you can show that if it had made a profit it would have been taxable, it may be able to claim the loss as a deduction. Show the loss with a minus sign at Box 20B.

Write the details of the loss on a separate sheet of paper and send it to us. Include details of other profits or losses made from similar sales, whether in this tax year or earlier.

Financial arrangements

A company must account for income from financial arrangements on an accrual basis. Financial arrangements include government stock, futures contracts and deferred property settlements. Changes to the rules for the treatment of financial arrangements have split the rules into two sets.

Generally the first set applies to financial arrangements entered into before 20 May 1999 and the second applies to financial arrangements entered into on or after 20 May 1999.

Both sets of rules require the income or expenditure to be spread over the term of the financial arrangement. This applies in every case - the company does not have to be in the business of buying or selling financial arrangements, or be intending to sell, as it would with shares. The company may, in certain cases, deduct any losses.

Sale or maturity of financial arrangements

When a financial arrangement matures or is sold, remitted or transferred, a "wash-up" calculation known as a base price adjustment must be carried out. The calculation ensures that the total gains or losses from the financial arrangement are brought to account.

If you need any information on when losses can be deducted, or calculating a base price adjustment, please phone us on 0800 443 773.

Income from an undertaking or scheme

Profits made from the carrying on or carrying out of any undertaking or schemes entered into for the purpose of making a profit are taxable. On a separate piece of paper write down what the undertaking or scheme was and list the details of income and expenses from these undertakings and schemes and send it to us. Include the total profit in Box 20B.

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Date published: 02 Dec 2004

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