|
| |
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228 | The additional calculation rule |
| |
(1) | The rule in this section applies if the conditions mentioned in section 227(2) are |
| |
| |
(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 |
| 5 |
accordance with this section in order to give the amount of the receipt under |
| |
| |
(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 |
| 10 |
(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 |
| |
| |
(4) | The basic relieving amount by reference to a taxed receipt is given by the |
| 15 |
formula—![equation: over[cross[char[A],times[char[L],char[R],char[P]]],times[char[T],char[R],char[P]]]](missing.gif) |
| |
| |
A is the unreduced amount of the taxed receipt (which is, generally, the |
| |
| |
section 277, 279, 280, 281 or 282 of ITTOIA 2005, but see section 230(2) |
| 20 |
| |
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 |
| |
| 25 |
(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 |
| |
| |
(b) | in the case of a receipt under section 219, the period in relation to which |
| |
the sum payable instead of rent is payable, |
| 30 |
(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 |
| 35 |
of property businesses: lease premiums etc), its receipt period within |
| |
the meaning of that Chapter (see section 288(6) of that Act). |
| |
229 | The additional calculation rule: special cases |
| |
(1) | This section explains how section 228 operates in some special cases. |
| |
| 40 |
(a) | the receipt under calculation is under any of sections 217 to 221, and |
| |
|
| |
|
| |
|
(b) | the lease does not extend to the whole of the premises subject to the |
| |
| |
| the basic relieving amount by reference to a taxed receipt is calculated by |
| |
multiplying the amount given by the formula in subsection (4) of section 228 |
| |
by the fraction of those premises which is subject to the lease. |
| 5 |
(3) | This fraction is calculated on a just and reasonable basis. |
| |
(4) | If the basic relieving amount given by section 228(4) or subsection (2) above by |
| |
reference to a taxed receipt would otherwise exceed the unused amount of the |
| |
taxed receipt, the basic relieving amount is the unused amount. |
| |
(5) | If the amount of the reduction under section 228 would otherwise exceed the |
| 10 |
amount given, in respect of the receipt under calculation, by the formula in |
| |
section 217, 219, 220, 221 or 222, the amount of the reduction is equal to the |
| |
amount given by the formula. |
| |
230 | Meaning of “unused amount” and “unreduced amount” |
| |
(1) | For the purposes of this Chapter, a taxed receipt has an “unused amount” if the |
| 15 |
unreduced amount exceeds the total of the reductions and deductions referred |
| |
| |
(2) | In this Chapter the “unreduced amount” of a taxed receipt is the amount given, |
| |
in respect of the taxed receipt, by the formula in— |
| |
| 20 |
(b) | section 277, 279, 280, 281 or 282 of ITTOIA 2005 (income tax provisions |
| |
corresponding to those listed in paragraph (a)). |
| |
(3) | Subsection (4) applies— |
| |
(a) | to a taxed receipt under section 217 (lease premiums) as a result of |
| |
section 218 (amount treated as lease premium where work required), |
| 25 |
| |
(b) | to a taxed receipt under section 277 of ITTOIA 2005 (lease premiums) |
| |
as a result of section 278 of that Act (amount treated as lease premium |
| |
| |
(4) | If the obligation to carry out work included the carrying out of work which |
| 30 |
gives, or will give, rise to qualifying expenditure under CAA 2001, the |
| |
unreduced amount of the taxed receipt is calculated as if the obligation had not |
| |
included the carrying out of that work. |
| |
(5) | The reductions and deductions mentioned in subsection (1) are— |
| |
(a) | the reductions under section 228 above or section 288 of ITTOIA 2005 |
| 35 |
(the additional calculation rule) by reference to the taxed receipt, |
| |
(b) | the deductions made in calculating the profits of a trade, profession or |
| |
vocation for expenses under section 63 above or section 61 of ITTOIA |
| |
2005 (tenant under taxed lease who uses land in connection with trade |
| |
treated as incurring expenses) by reference to the taxed receipt, and |
| 40 |
(c) | the deductions made in calculating the profits of a property business |
| |
for expenses under section 232 below or section 292 of ITTOIA 2005 |
| |
(tenant under taxed lease who uses premises for purposes of property |
| |
business treated as incurring expenses) by reference to the taxed |
| |
| 45 |
|
| |
|
| |
|
(6) | For the purposes of this Chapter references to a reduction under section 228 |
| |
above or section 288 of ITTOIA 2005 by reference to a taxed receipt are to a |
| |
reduction under the section concerned so far as attributable to the taxed |
| |
| |
Deductions in relation to certain receipts |
| 5 |
231 | Deductions for expenses under section 232 |
| |
(1) | Section 232 (tenants under taxed leases treated as incurring expenses) applies |
| |
in calculating the profits of a property business carried on by the tenant under |
| |
a taxed lease for the purpose of making deductions for the expenses of the |
| |
| 10 |
(2) | A deduction is allowed for an expense under section 232 for a qualifying day |
| |
on which the whole or part of the premises subject to the taxed lease is— |
| |
(a) | occupied by the tenant for the purpose of carrying on the property |
| |
| |
| 15 |
(3) | But any deduction for an expense under section 232 is subject to the application |
| |
of any provision of Chapter 4 of Part 3 (as applied to property businesses by |
| |
| |
(4) | The amount of the deduction for an expense under section 232 for a qualifying |
| |
day by reference to a taxed receipt may be reduced in order to comply with |
| 20 |
section 235 (limit on reductions and deductions). |
| |
(5) | For the meaning of expressions used in this section, see in particular— |
| |
section 227(4) (“taxed lease”), and |
| |
section 227(4) (“taxed receipt”). |
| |
232 | Tenants under taxed leases treated as incurring expenses |
| 25 |
(1) | The tenant under a taxed lease is treated as incurring an expense of a revenue |
| |
nature in respect of the premises subject to the taxed lease for each qualifying |
| |
| |
(2) | If there is more than one taxed receipt, this section applies separately in |
| |
relation to each of them. |
| 30 |
(3) | A day is a “qualifying day”, in relation to a taxed receipt, if it falls within the |
| |
receipt period of the taxed receipt. |
| |
(4) | The amount of the expense for the qualifying day by reference to the taxed |
| |
receipt is given by the formula—![equation: over[char[A],times[char[T],char[R],char[P]]]](missing.gif) |
| |
| 35 |
A is the unreduced amount of the taxed receipt, and |
| |
TRP is the number of days in the receipt period of the taxed receipt. |
| |
(5) | This section is subject to sections 233 and 234 (restrictions on expenses where |
| |
the additional calculation rule is relevant). |
| |
|
| |
|
| |
|
(6) | For the meaning of expressions used in this section, see in particular— |
| |
section 228(6) (“receipt period”), and |
| |
section 230(2) to (4) (“unreduced amount”). |
| |
233 | Restrictions on section 232 expenses: the additional calculation rule |
| |
(1) | This section applies if— |
| 5 |
(a) | in calculating the amount of a receipt under this Chapter there is a |
| |
reduction under section 228 (the additional calculation rule) by |
| |
reference to a taxed receipt, or |
| |
(b) | in calculating the amount of a receipt under Chapter 4 of Part 3 of |
| |
ITTOIA 2005 (profits of a property business: lease premiums etc) there |
| 10 |
is a reduction under section 288 of that Act (the additional calculation |
| |
rule) by reference to a taxed receipt. |
| |
| The receipt that is so reduced is referred to in this section as the “lease premium |
| |
| |
(2) | Subsections (3) to (5) provide for the application of section 232 for a qualifying |
| 15 |
day that falls within the receipt period of the lease premium receipt. |
| |
(3) | The tenant under the taxed lease is treated as incurring an expense under |
| |
section 232 for the qualifying day by reference to the taxed receipt only if the |
| |
daily amount of the taxed receipt exceeds the daily reduction of the lease |
| |
| 20 |
(4) | If the condition in subsection (3) is met, the amount of the expense under |
| |
section 232 for the qualifying day by reference to the taxed receipt is equal to |
| |
| |
(5) | If the qualifying day falls within the receipt periods of more than one lease |
| |
premium receipt, the reference in subsection (3) to the daily reduction of the |
| 25 |
lease premium receipt is to be read as a reference to the total of the daily |
| |
reductions of each of the lease premium receipts whose receipt period includes |
| |
| |
| |
the “daily amount” of the taxed receipt is given by the formula—![equation: over[char[A],times[char[T],char[R],char[P]]]](missing.gif) |
| 30 |
| |
A is the unreduced amount of the taxed receipt (see section 230(2) to |
| |
| |
TRP is the number of days in the receipt period of the taxed receipt, and |
| |
| 35 |
the “daily reduction” of a lease premium receipt is given by the formula—![equation: over[times[char[A],char[R]],times[char[R],char[R],char[P]]]](missing.gif) |
| |
| |
AR is the reduction under section 228 above or section 288 of ITTOIA |
| |
2005 by reference to the taxed receipt (see section 230(6)), and |
| |
|
| |
|
| |
|
RRP is the number of days in the receipt period of the lease premium |
| |
| |
(7) | Section 234 explains how this section operates if the lease premium receipt is |
| |
in respect of a lease that has been granted out of the taxed lease and does not |
| |
extend to the whole of the premises subject to the taxed lease. |
| 5 |
234 | Restrictions on section 232 expenses: lease of part of premises |
| |
(1) | This section applies if— |
| |
(a) | a lease has been granted out of the taxed lease, |
| |
(b) | the lease does not extend to the whole of the premises subject to the |
| |
| 10 |
(c) | the condition in subsection (2) is met. |
| |
(2) | The condition is that— |
| |
(a) | in calculating the amount of a receipt under any of sections 217 to 221 |
| |
(receipts in respect of lease premiums or sums payable instead of rent, |
| |
for surrender of lease or for variation or waiver of terms of lease) in |
| 15 |
respect of the lease, there is a reduction under section 228 by reference |
| |
| |
(b) | in calculating the amount of a receipt under any of sections 277 to 281 |
| |
of ITTOIA 2005 (receipts in respect of lease premiums or sums payable |
| |
instead of rent, for surrender of lease or for variation or waiver of terms |
| 20 |
of lease) in respect of the lease, there is a reduction under section 288 of |
| |
that Act (the additional calculation rule) by reference to a taxed receipt. |
| |
| The receipt that is so reduced is referred to in this section as the “lease premium |
| |
| |
(3) | Subsections (4) to (6) apply for a qualifying day that falls within the receipt |
| 25 |
period of the lease premium receipt. |
| |
(4) | Sections 232 and 233 apply separately in relation to the part of the premises |
| |
subject to the lease and to the remainder of the premises. |
| |
| |
(a) | more than one lease that does not extend to the whole of the premises |
| 30 |
subject to the taxed lease has been granted out of the taxed lease, and |
| |
(b) | the qualifying day falls within the receipt period of two or more lease |
| |
premium receipts that relate to different leases, |
| |
| sections 232 and 233 apply separately in relation to each part of the premises |
| |
subject to a lease to which such a receipt relates and to the remainder of the |
| 35 |
| |
(6) | Where sections 232 and 233 apply in relation to a part of the premises, A |
| |
becomes the amount calculated by multiplying the unreduced amount of the |
| |
taxed receipt by the fraction of the premises constituted by the part. |
| |
(7) | This fraction is calculated on a just and reasonable basis. |
| 40 |
Limit on effect of additional calculation rule and deductions |
| |
235 | Limit on reductions and deductions |
| |
| |
|
| |
|
| |
|
(a) | the reductions under section 228 by reference to a taxed receipt, and |
| |
(b) | the deductions allowed in calculating the profits of a property business |
| |
for expenses under section 232 (tenant under taxed lease which uses |
| |
premises for purposes of property business treated as incurring |
| |
expenses) by reference to the taxed receipt, |
| 5 |
| must not exceed the amount referred to in subsection (2). |
| |
(2) | The amount mentioned in subsection (1) is the difference between— |
| |
(a) | the unreduced amount of the taxed receipt, and |
| |
(b) | the total of the amounts mentioned in subsection (3). |
| |
| 10 |
(a) | the reductions under section 288 of ITTOIA 2005 (the additional |
| |
calculation rule) by reference to the taxed receipt, |
| |
(b) | the deductions made in calculating the profits of a property business |
| |
for expenses under section 292 of ITTOIA 2005 (tenant under taxed |
| |
lease who uses premises for purposes of property business treated as |
| 15 |
incurring expenses) by reference to the taxed receipt, and |
| |
(c) | the deductions made in calculating the profits of a trade, profession or |
| |
vocation for expenses under section 63 above or section 61 of ITTOIA |
| |
2005 (tenant under taxed lease who uses land in connection with trade |
| |
treated as incurring expenses) by reference to the taxed receipt. |
| 20 |
Certain administrative provisions |
| |
236 | Payment of tax by instalments |
| |
(1) | This section applies if— |
| |
(a) | there is a receipt under section 217 (lease premiums) in respect of a |
| |
premium which is payable by instalments, or |
| 25 |
(b) | there is a receipt under any of sections 219 to 221 (sums payable instead |
| |
of rent, for surrender of lease or for variation or waiver of terms of |
| |
lease) in respect of a sum which is payable by instalments. |
| |
(2) | The company which is liable to pay tax by reference to the receipt may choose |
| |
to pay the tax by such instalments as an officer of Revenue and Customs may |
| 30 |
| |
(3) | The period over which the instalments of tax must be paid— |
| |
(a) | must be 8 years or less, and |
| |
(b) | must end before, or at the same time as, the time when the last of the |
| |
instalments mentioned in subsection (1)(a) or (b) is payable. |
| 35 |
237 | Statement of accuracy for purposes of section 222 |
| |
(1) | This section applies if any of the persons mentioned in subsection (3) provides |
| |
an officer of Revenue and Customs with a statement showing— |
| |
(a) | whether or not there is, or may be, a receipt under section 222 |
| |
(assignments for profit of lease granted at undervalue), and |
| 40 |
(b) | the amount of any receipt. |
| |
(2) | The officer must certify the accuracy of the statement, if satisfied as to its |
| |
| |
|
| |
|
| |
|
(3) | The persons referred to in subsection (1) are— |
| |
(a) | the landlord who granted the lease, |
| |
(b) | a company which assigned it, or |
| |
(c) | a person to whom it was assigned. |
| |
238 | Claim for repayment of tax payable by virtue of section 224 |
| 5 |
(1) | This section applies if— |
| |
(a) | there is a receipt under section 224 (sales with right to reconveyance), |
| |
| |
(b) | the date on which the estate or interest would fall to be reconveyed was |
| |
not fixed under the terms of the sale. |
| 10 |
(2) | If the seller makes a claim, the seller must be repaid the amount by which A |
| |
| |
A is the amount of tax paid by the seller which was payable by virtue of |
| |
| |
B is the amount of tax that would have been so payable if the date on |
| 15 |
which the estate or interest was reconveyed had been taken as the date |
| |
fixed by the terms of the sale. |
| |
(3) | The claim must be made within 4 years after the day on which the estate or |
| |
| |
239 | Claim for repayment of tax payable by virtue of section 225 |
| 20 |
(1) | This section applies if— |
| |
(a) | there is a receipt under section 225 (sale and leaseback transactions), |
| |
| |
(b) | the date for the grant of the lease was not fixed under the terms of the |
| |
| 25 |
(2) | If the seller makes a claim, the seller must be repaid the amount by which A |
| |
| |
A is the amount of tax paid by the seller which was payable by virtue of |
| |
| |
B is the amount of tax that would have been so payable if the date on |
| 30 |
which the lease was granted had been taken as the date fixed by the |
| |
| |
(3) | The claim must be made within 4 years after the day on which the lease was |
| |
| |
Determinations affecting liability of more than one person |
| 35 |
240 | Appeals against proposed determinations |
| |
(1) | Subsection (2) applies if it appears to an officer of Revenue and Customs that— |
| |
(a) | a determination is needed of an amount that is to be brought into |
| |
account as a receipt under this Chapter in calculating the liability to tax |
| |
of a person (“the first taxpayer”), and |
| 40 |
(b) | the determination may affect the liability to corporation tax, income tax |
| |
or capital gains tax of other persons. |
| |
|
| |
|