Skip to content
Solved
SearchBrowse
Sign in

Contents

Legislation
Corporation Tax Act 2009

Crossheading Amounts treated as receipts: leases

  • Section 217 Lease premiums
  • Section 218 Amount treated as lease premium where work required
  • Section 219 Sums payable instead of rent
  • Section 220 Sums payable for surrender of lease
  • Section 221 Sums payable for variation or waiver of terms of lease
  • Section 221A Sums to which sections 217 to 221 do not apply
  • Section 222 Assignments for profit of lease granted at undervalue
  • Section 223 Provisions supplementary to section 222
  1. Amounts treated as receipts: leases
  2. Sums payable instead of rent

Section 219 | Sums payable instead of rent

From legislation.gov.uk

(1)This section applies if—

(a)under the terms subject to which a lease is granted a sum becomes payable by the tenant instead of the whole or a part of the rent for a period, and

(b)the period is 50 years or less.

(2)The company to which the sum is due is treated as—

(a)entering into a transaction mentioned in section 205 (if the land to which the lease relates is in the United Kingdom) or section 206 (if that land is outside the United Kingdom), and

(b)receiving the amount calculated under subsections (4) and (5) as a result of that transaction.

(3)That amount is brought into account as a receipt in calculating the profits of the property business which consists of or includes that transaction for the accounting period in which the sum becomes payable.

(4)The amount of the receipt is given by the formula—

Formula

S×50-Y50

where—

S is the sum payable instead of rent, and

Y is the number of complete periods of 12 months (other than the first) comprised in the period in relation to which the sum is payable.

(5)But, if the rule in section 228 (the additional calculation rule) applies, the amount given by the formula in subsection (4) is reduced by the amount calculated in accordance with section 228.

(6)In determining for the purposes of this Chapter the duration of the period in relation to which the sum is payable, any part of the period that falls after the expiry of the effective duration of the lease is excluded.

PreviousNext
PrivacyTerms