|
| |
|
(b) | the sum is due to the landlord or a person who is connected with the |
| |
| |
(c) | the period for which the variation or waiver has effect is 50 years or less. |
| |
(2) | The person to whom the sum is due is treated as— |
| |
(a) | entering into a transaction mentioned in section 264 (if the land to |
| 5 |
which the lease relates is in the United Kingdom) or section 265 (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 |
| 10 |
property business which consists of or includes that transaction for the tax year |
| |
in which the contract providing for the variation or waiver is entered into. |
| |
(4) | The amount of the receipt is given by the formula— |
| |
| |
S is the sum payable as consideration for the variation or waiver, and |
| 15 |
Y is the number of complete periods of 12 months (other than the first) |
| |
comprised in the period for which the variation or waiver has effect. |
| |
(5) | But, if the rule in section 288 (the additional calculation rule) applies, the |
| |
amount given by the formula in subsection (4) is reduced by the amount |
| |
calculated in accordance with section 288. |
| 20 |
(6) | In determining for the purposes of this Chapter the duration of the period for |
| |
which the variation or waiver has effect, any part of the period that falls after |
| |
the expiry of the effective duration of the lease is excluded. |
| |
282 | Assignments for profit of lease granted at undervalue |
| |
(1) | This section applies to an assignment of a short-term lease if— |
| 25 |
(a) | the lease was granted at an undervalue, and |
| |
(b) | a profit is made on the assignment. |
| |
(2) | The person who assigns the lease is treated as— |
| |
(a) | entering into a transaction mentioned in section 264 (if the land to |
| |
which the lease relates is in the United Kingdom) or section 265 (if that |
| 30 |
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 tax year |
| 35 |
in which the consideration for the assignment becomes payable. |
| |
(4) | The amount of the receipt is given by the formula— |
| |
|
| |
|
| |
|
| |
| |
(a) | the profit on the assignment, and |
| |
(b) | the amount by which the undervalue exceeds the total of the |
| |
profits (if any) made on previous assignments of the lease, and |
| 5 |
Y is the number of complete periods of 12 months (other than the first) |
| |
comprised in the effective duration of the lease. |
| |
(5) | But, if the rule in section 288 (the additional calculation rule) applies, the |
| |
amount given by the formula in subsection (4) is reduced by the amount |
| |
calculated in accordance with section 288. |
| 10 |
(6) | Section 283 explains references in this section to the grant of a lease at an |
| |
undervalue and the making of a profit on an assignment of a lease. |
| |
283 | Provisions supplementary to section 282 |
| |
(1) | This section operates for the purposes of section 282. |
| |
(2) | A lease is granted at an undervalue if the terms subject to which it was granted |
| 15 |
are such that the landlord who granted it could have required the payment of |
| |
an additional sum by way of premium, or additional premium, for its grant. |
| |
(3) | The additional sum is the undervalue. |
| |
(4) | The test in subsection (2) must be applied— |
| |
(a) | having regard to values prevailing at the time the lease was granted, |
| 20 |
| |
(b) | on the assumption that the negotiations for the lease were at arm’s |
| |
| |
(5) | A profit is made on an assignment of a lease if the consideration for the |
| |
| 25 |
(a) | if the lease has not previously been assigned, any premium for which it |
| |
| |
(b) | in any other case, any consideration for which it was last assigned. |
| |
(6) | The amount of the excess is the profit. |
| |
Other amounts treated as receipts |
| 30 |
284 | Sales with right to reconveyance |
| |
(1) | This section applies if— |
| |
(a) | an estate or interest in land is sold subject to terms which provide that |
| |
it is to be, or may be required to be, reconveyed on a future date to the |
| |
seller or a person connected with the seller, |
| 35 |
(b) | the period beginning with the sale and ending with the earliest date on |
| |
which under the terms of the sale the estate or interest would fall to be |
| |
reconveyed is 50 years or less, and |
| |
(c) | the price at which the estate or interest is sold exceeds the price at which |
| |
| 40 |
(2) | The seller is treated as— |
| |
|
| |
|
| |
|
(a) | entering into a transaction mentioned in section 264 (if the land is in the |
| |
United Kingdom) or section 265 (if the land is outside the United |
| |
| |
(b) | receiving the amount calculated under subsection (4) as a result of that |
| |
| 5 |
(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 tax year |
| |
in which the estate or interest is sold. |
| |
(4) | The amount of the receipt is given by the formula— |
| |
| 10 |
E is the amount by which the price at which the estate or interest is sold |
| |
exceeds the price at which it is to be reconveyed, and |
| |
Y is the number of complete periods of 12 months (other than the first) |
| |
comprised in the period beginning with the sale and ending with the |
| |
earliest date on which under the terms of the sale the estate or interest |
| 15 |
would fall to be reconveyed. |
| |
(5) | See section 286 for some provisions which are supplementary to this section. |
| |
285 | Sale and leaseback transactions |
| |
(1) | This section applies if— |
| |
(a) | an estate or interest in land is sold subject to terms which provide for |
| 20 |
the grant of a lease directly or indirectly out of the estate or interest to |
| |
the seller or a person connected with the seller, |
| |
(b) | the period beginning with the sale and ending with the earliest date on |
| |
which under the terms of the sale the lease would fall to be granted is |
| |
| 25 |
(c) | the price at which the estate or interest is sold exceeds the total of— |
| |
(i) | the amount of any premium for the lease, and |
| |
(ii) | the value on the date of the sale of the right to receive a |
| |
conveyance of the reversion immediately after the lease begins |
| |
| 30 |
(2) | This section does not apply if the lease is granted and begins to run within one |
| |
| |
(3) | The seller is treated as— |
| |
(a) | entering into a transaction mentioned in section 264 (if the land is in the |
| |
United Kingdom) or section 265 (if the land is outside the United |
| 35 |
| |
(b) | receiving the amount calculated under subsection (5) as a result of that |
| |
| |
(4) | 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 tax year |
| 40 |
in which the estate or interest is sold. |
| |
|
| |
|
| |
|
(5) | The amount of the receipt is given by the formula— |
| |
| |
E is the amount by which the price at which the estate or interest is sold |
| |
| |
(a) | the amount of any premium for the lease, and |
| 5 |
(b) | the value on the date of the sale of the right to receive a |
| |
conveyance of the reversion immediately after the lease begins |
| |
| |
Y is the number of complete periods of 12 months (other than the first) |
| |
comprised in the period beginning with the sale and ending with the |
| 10 |
earliest date on which under the terms of the sale the lease would fall |
| |
| |
(6) | See section 286 for some provisions which are supplementary to this section. |
| |
286 | Provisions supplementary to sections 284 and 285 |
| |
(1) | This section operates for the purposes of sections 284 (sales with right to |
| 15 |
reconveyance) and 285 (sale and leaseback transactions). |
| |
(2) | Subsection (3) explains how to determine for the purposes of section 284 the |
| |
price at which an estate or interest is to be reconveyed when— |
| |
(a) | the date on which the estate or interest would fall to be reconveyed is |
| |
not fixed under the terms of the sale, and |
| 20 |
(b) | the price at which it is to be reconveyed varies with the date. |
| |
(3) | The price is taken to be the lowest possible under the terms of the sale. |
| |
(4) | Subsection (5) explains how to determine for the purposes of section 285 the |
| |
| |
(a) | the amount of any premium for the lease, and |
| 25 |
(b) | the value on the date of the sale of the right to receive a conveyance of |
| |
the reversion immediately after the lease begins to run, |
| |
| when the date for the grant of the lease is not fixed under the terms of the sale |
| |
and the total varies with the date. |
| |
(5) | The total is taken to be the lowest possible under the terms of the sale. |
| 30 |
(6) | For the purposes of sections 284(3) and 285(4) (receipts of property business for |
| |
tax year in which estate or interest sold) an estate or interest in land is sold |
| |
when any of the following occurs— |
| |
(a) | an unconditional contract for its sale is entered into, |
| |
(b) | a conditional contract for its sale becomes unconditional, or |
| 35 |
(c) | an option or right of pre-emption is exercised requiring the seller to |
| |
enter into an unconditional contract for its sale. |
| |
|
| |
|