The following published concession 55 operated up to the year of assessment 2008. It is not applicable from the year of assessment 2009 but the basis of assessment of the rents etc. may remain 'grandfathered' for those companies who historically included Jersey rents and expenses in the computation of the Schedule D Case 1 profits.
"Where a trader received rent from a property owned or leased by him which does not form part of the property used by him or the purposes of his trade, the rent received and all expenses relating to the property must be eliminated from the computation of trading profits. However, if there has been a long-standing practice to include the rent and expenses in the computation, that practice will be allowed to continue."
For the avoidance of doubt, the following shall apply from the year of assessment 2009.
Where a trader receives rent from a property owned or leased by him which does form part of the property used by him for the purpose of his trade, the rent received and all expenses relating to that part of the property which is let must be eliminated from the computation of trading profits. Any other relevant expenses which are not exclusive to that part of the property which is let may be apportioned on a reasonable basis and deducted from the rent received.
- from the year of assessment 2009 the company must continue to submit its financial statements together with a tax computation showing separately the Jersey rents etc. and associated allowable expenses and the resultant Schedule A assessment
- the basis of assessment of the rents etc. may continue to be the profits and gains arising in the financial year ending in the year of assessment. These are taxed on the company at the standard rate of 20%
- the basis of assessment of trading profits and gains are those arising in the financial year ending in the year of assessment. These are taxed on the company at the corporate rate of 0%. The relevant profits are subject to the shareholder deemed provisions
Example
| Financial year ended 30 March 2009 | Tax adjusted profit (rents) | £25,000 | Relevant profit (trading) | £5,000 |
| Financial year ended 30 March 2010 | Tax adjusted profit (rents) | £30,000 | Relevant profit (trading) | £6,000 |
Schedule A assessment on company
| 2009 assessment (year ended 30 March 2009) | £25,000 |
| 2010 assessment (year ended 30 March 2010) | £30,000 |
Relevant trading profit subject to deemed distribution provisions to Jersey resident shareholders
| Year ended 30 March 2009 | £5,000 |
| Year ended 30 March 2010 | £6,000 |
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