Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Profits definition

What does Profits mean? Profits describes the net surplus generated by a business or asset after deducting relevant costs, used to assess performance, tax liabilities, distributions and damages. The precise meaning is context‑specific. For corporation tax in the UK and Ireland, legislation provides that a company’s profits include both income and chargeable gains (capital gains), not just trading results. Key distinctions include: - Accounting profit: measured under applicable GAAP. - Taxable profits: accounting profit adjusted by statute (for example, disallowables, capital allowances, losses and group relief). - Distributable profits: profits available for lawful dividends under companies legislation (UK Companies Act 2006, Irish Companies Act 2014), broadly the company’s...

Property income: the UK income tax charge—scope, computation, timing, property business definition, territorial rules and Finance Act 2026 property rates and ordering

Published by a LexisNexis Tax expert

Practice notes

Forthcoming change:

Sections 6–7 of the Finance act 2026 provide that, with effect from 6 April 2027, an individual’s property income will be subject to income tax at the property basic rate of 22%, the property higher rate of 42%, and the property additional rate of 47% for a given tax year.

A person’s property income is treated as the highest portion of their income, save where they also have savings and/or dividend income. Where savings and/or dividend income arises, the property income is taken to be the portion of the person’s income that falls immediately before the savings and/or dividend income.

FA 2026, Schedule 1, makes consequential amendments to ITA 2007.

For these purposes, property income means income that is:

chargeable under Chapter 3 of Part 3 of ITTOIA 2005 (profits of a UK property business or an overseas property business)
chargeable under Chapter 7 of that Part
chargeable under Chapter 8 of that Part
chargeable under Chapter 9 of that Part, and
chargeable under Chapter 10 of that Part

The charge to UK income tax applies to the profits of both a UK and an overseas property business...

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Web page updated on 22/05/2026

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