BLM72035 | ’Income-into-capital’ schemes and back loaded leases: Relief for set-offs against rentals: cumulative accountancy rental excess: interaction with relief in CG computations

In considering the interaction of cumulative accountancy rental excesses with relief in capital gains computations there are two points to note:

• First, relief for cumulative accountancy rental excess is given against normal rent arising prior to the disposal of a lease (or of an asset representing the leased asset) in priority to relief in the capital gains computation. How this is achieved in drafting terms is explained in BLM72030.

• Secondly, cumulative accountancy rental excess available for subsequent set-off against normal rent is reduced by any amount deducted in the capital gains computation on an earlier disposal.