Syllabus E. Corporation Tax Liabilities E2. Taxable total profits

E2d. Property business profits/losses - for Companies 4 / 14

Syllabus E2d)

Compute property business profits and understand how relief for a property business loss is given.
The use of such exemptions and reliefs is implicit within all of the above sections 1 to 5 of part E of the syllabus, concerning corporation tax.

Compute property business profits

The calculation of property business profits is exactly the same as that for individuals with 4 exceptions:

  • Interest payable on a loan to buy an investment property is deducted from “Interest income” under the loan relationship rules as opposed to “property business profits”. 

    The 100% restriction to interest expenses that we saw in the income tax topic does not apply to companies.

  • There is no rent a room relief for companies as a company will not have a main residence.

  • Property losses for a company are entirely relieved against Total Income of the:
    1) current year or
    2) carried forward to future years.

    Property losses CANNOT be carried back 12 months. ONLY Trading losses CAN

    Qualifying charitable donations (QCD) CANNOT be saved!

    LOSS must be deducted first and if any income remains - then the QCD can be deducted

  • Property income is calculated using the accruals basis for companies, not the cash basis.

Please refer to Topics: Computation of property business profits, Furnished holiday lettings, rent a room relief, premiums granted for short leases, property business loss relief to review how property business profits are calculated.


For the year ended 31/03/2021 Theta Ltd. has:
Trading income  £100,000 
Property loss (£20,000)
Qualifying charitable donation  £85,000

What will Theta Ltd. taxable total profits be?


Trading income £100,000
Property loss (£20,000)
Net income £80,000
Qualifying charitable donation  (£80,000)
Taxable total profit Nil 

Note that the property loss is relieved before the qualifying charitable donation against total income.

Additionally, this has resulted in £5,000 of the qualifying charitable donation being wasted.