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Trading allowance entitlement on book royalties.
I have clients with royalty income. Some have royalties from books they have written and others from books written by their late spouse. Do readers believe that the £1 000 allowance is available against this income? My understanding is that royalties received by an individual other than the author are chargeable to income tax as miscellaneous income.
HMRC advised me that this income did not derive from a trade and therefore the allowance was not available. Would this also apply to authors and composers whose royalties are small?
I had hoped to claim the allowance and thus simplify my client’s tax affairs because this income is less than £1 000. I believed the original intention of the allowance was to make tax simpler!
I look forward to what readers might think about this.
Query 19 209 – Juggler.
Reply by Bramble
All trades must be combined for...
