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Legislation
Corporation Tax Act 2009

Crossheading Additional calculation rule for reducing certain receipts

  • Section 227 Circumstances in which additional calculation rule applies
  • Section 228 The additional calculation rule
  • Section 229 The additional calculation rule: special cases
  • Section 230 Meaning of “unused amount” and “unreduced amount”
  1. Additional calculation rule for reducing certain receipts
  2. The additional calculation rule

Section 228 | The additional calculation rule

From legislation.gov.uk

(1)The rule in this section applies if the conditions mentioned in section 227(2) are met.

(2)The additional calculation rule is that the amount given by the formula in section 217, 219, 220, 221 or 222 must be reduced by the amount calculated in accordance with this section in order to give the amount of the receipt under calculation.

(3)The amount of the reduction is—

(a)if there is one taxed receipt which has an unused amount, the basic relieving amount by reference to that receipt, and

(b)if there is more than one taxed receipt which has an unused amount, the total of the basic relieving amounts by reference to each receipt,

adjusted, if necessary, in the light of section 229(5) (reduction not to exceed amount being reduced).

(4)The basic relieving amount by reference to a taxed receipt is given by the formula—

Formula

A×LRPTRP

where—

A is the unreduced amount of the taxed receipt (which is, generally, the amount given by the formula in section 217, 219, 220, 221 or 222, or in section 277, 279, 280, 281 or 282 of ITTOIA 2005, but see section 230(2) to (4) of this Act),

LRP is the receipt period of the receipt under calculation, and

TRP is the receipt period of the taxed receipt.

(5)But the basic relieving amount is different if section 229(2) or (4) applies (certain special cases).

(6)For the purposes of this Chapter, the “receipt period” of a receipt is—

(a)in the case of a receipt under section 217 or 220, the effective duration of the lease,

(b)in the case of a receipt under section 219, the period in relation to which the sum payable instead of rent is payable,

(c)in the case of a receipt under section 221, the period for which the variation or waiver has effect,

(d)in the case of a receipt under section 222, the effective duration of the lease remaining at the date of the assignment, and

(e)in the case of a receipt under Chapter 4 of Part 3 of ITTOIA 2005 (profits of property businesses: lease premiums etc), its receipt period within the meaning of that Chapter (see section 288(6) of that Act).

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