|
| |
| |
(2) | The officer may give notice (a “provisional notice of determination”) to the first |
| |
taxpayer and the other persons of— |
| |
(a) | the determination the officer proposes to make, and |
| |
(b) | their rights under this section and section 242. |
| |
(3) | A person to whom a provisional notice of determination is given may object to |
| 5 |
the proposed determination by giving notice (“a notice of objection”) to the |
| |
| |
(4) | The notice of objection must be given within 30 days of the date on which the |
| |
provisional notice of determination was given. |
| |
(5) | If an officer gives provisional notices of determination and no person gives a |
| 10 |
| |
(a) | a determination must be made by the officer as proposed in the |
| |
| |
(b) | the determination is not to be called in question in any proceedings. |
| |
241 | Section 240: supplementary |
| 15 |
(1) | A provisional notice of determination under section 240(2) may include a |
| |
statement of the grounds on which the officer proposes to make the |
| |
| |
(2) | Subsection (1) applies despite any obligation as to secrecy or other restriction |
| |
on the disclosure of information. |
| 20 |
(3) | An officer of Revenue and Customs may by notice (a “preliminary notice”) |
| |
require any person to give any information that appears to the officer to be |
| |
needed for deciding whether to give any person a provisional notice of |
| |
determination under section 240(2). |
| |
(4) | The preliminary notice must state the time within which the information is to |
| 25 |
| |
242 | Determination by tribunal |
| |
(1) | If a notice of objection is given under section 240(3), the amount mentioned in |
| |
section 240(1) must be determined in the same way as an appeal. |
| |
(2) | All persons to whom provisional notices of determination have been given |
| 30 |
under section 240(2) may take part— |
| |
(a) | in any proceedings under subsection (1), and |
| |
(b) | in any appeal arising out of those proceedings. |
| |
(3) | Those persons are bound by the determination made in the proceedings or on |
| |
appeal, whether or not they have taken part in the proceedings. |
| 35 |
(4) | Their successors in title are bound in the same way. |
| |
Effective duration of lease |
| |
243 | Rules for determining effective duration of lease |
| |
(1) | The following rules apply for determining the effective duration of a lease for |
| |
the purposes of this Chapter. |
| 40 |
| |
| |
|
| |
| |
| |
(a) | the terms of the lease or any other circumstances make it |
| |
unlikely that the lease will continue beyond a date before the |
| |
end of the term for which the lease was granted, and |
| |
(b) | the premium was not substantially greater than it would have |
| 5 |
been had the term been one ending on that date, |
| |
the lease is treated as ending on that date (or the earliest such date). |
| |
Rule 2: If the terms of the lease include provision for the extension of the |
| |
lease beyond a given date by notice given by the tenant, account may |
| |
be taken of any circumstances making it likely that the lease will be so |
| 10 |
| |
Rule 3: If the tenant or a person connected with the tenant is, or may |
| |
become, entitled to a further lease or the grant of a further lease |
| |
| |
(a) | of the same premises, or |
| 15 |
(b) | of premises including the whole or part of the same premises, |
| |
the term of the lease may be treated as continuing until the end of the |
| |
term of the further lease. |
| |
(2) | The rules are to be applied in accordance with section 244. |
| |
(3) | In Rule 1, “premium” includes— |
| 20 |
(a) | an amount treated as a premium under section 218 (amount treated as |
| |
lease premium where work required), |
| |
(b) | a sum payable by the tenant under the terms subject to which the lease |
| |
is granted instead of the whole or a part of the rent for a period, |
| |
(c) | a sum payable by the tenant under the terms subject to which the lease |
| 25 |
is granted as consideration for the surrender of the lease, and |
| |
(d) | a sum payable by the tenant (otherwise than by way of rent) as |
| |
consideration for the variation or waiver of a term of the lease. |
| |
(4) | In this section and section 244, in relation to Scotland, “term”, where referring |
| |
to the duration of a lease, means period. |
| 30 |
244 | Applying the rules in section 243 |
| |
(1) | The rules in section 243 apply by reference to the facts known or |
| |
| |
(a) | at the time of the grant of the lease, or |
| |
(b) | if the determination is for the purposes of section 221 (sums payable for |
| 35 |
variation or waiver of terms of lease), at the time when the contract for |
| |
the variation or waiver is entered into. |
| |
(2) | In applying those rules, it is assumed that all parties concerned, whatever their |
| |
relationship, act as if they were at arm’s length. |
| |
(3) | Subsection (5) applies if— |
| 40 |
(a) | special benefits were conferred by the lease or in connection with its |
| |
| |
(b) | payments were made which one would not expect to be made by |
| |
parties acting at arm’s length unless such benefits had been conferred. |
| |
(4) | But subsection (5) does not apply if it can be shown that the special benefits |
| 45 |
were not conferred nor the payments made for the purpose of securing— |
| |
| |
| |
|
| |
| |
(a) | a corporation tax advantage in the application of this Chapter, or |
| |
(b) | an income tax advantage in the application of Chapter 4 of Part 3 of |
| |
ITTOIA 2005 (profits of property business: lease premiums etc). |
| |
(5) | In applying paragraph (b) of Rule 1 in section 243, it is assumed that the special |
| |
benefits would not have been conferred nor the payments made if the lease had |
| 5 |
been granted for a term ending on the date mentioned in that rule. |
| |
(6) | In this section “special benefits” means benefits other than— |
| |
(a) | vacant possession and beneficial occupation of the premises, or |
| |
(b) | the right to receive rent at a reasonable commercial rate in respect of the |
| |
| 10 |
245 | Information about effective duration of lease |
| |
(1) | This section applies if an officer of Revenue and Customs has reason to believe |
| |
that a person has information relevant to the determination of the effective |
| |
| |
(2) | The officer may by notice require the person to provide such information on |
| 15 |
the matters specified in the notice as is in the person’s possession. |
| |
(3) | The information must be provided within a time specified in the notice. |
| |
(4) | In relation to anything done by a solicitor on behalf of a client, the solicitor is |
| |
| |
(a) | state that the solicitor was acting on behalf of a client, and |
| 20 |
(b) | provide the name and address of the client. |
| |
Other interpretative provisions |
| |
246 | Provisions about premiums |
| |
(1) | For the purposes of this Chapter, the presumption is that a sum paid on or in |
| |
connection with the granting of a tenancy has been paid by way of premium. |
| 25 |
(2) | This does not apply if the sum is rent. |
| |
(3) | This also does not apply so far as other sufficient consideration for the payment |
| |
can be shown to have been given. |
| |
(4) | In this section “sum” includes the value of any consideration. |
| |
(5) | Where Rule 3 in section 243 (rules for determining effective duration of lease) |
| 30 |
applies, the premium, or an appropriate part of it, payable for or in connection |
| |
with either lease mentioned in that rule may be treated for the purposes of this |
| |
Chapter as having been required under the other. |
| |
| |
(1) | In this Chapter “premium” includes any similar sum payable to the immediate |
| 35 |
or a superior landlord or to a person connected with such a person. |
| |
(2) | In subsection (1) “sum” includes the value of any consideration. |
| |
(3) | In the application of this Chapter to Scotland— |
| |
| |
| |
|
| |
| |
“premium” includes, in particular, a grassum payable to the landlord |
| |
under the lease in respect of which the grassum is payable or the |
| |
landlord under any other lease of the property, and |
| |
“reversion” means the interest of the landlord in the property subject to |
| |
| 5 |
(4) | In the application of this Chapter to Scotland— |
| |
(a) | references to a lease being granted out of a taxed lease are to the grant |
| |
of a sublease of land subject to the taxed lease, and |
| |
(b) | references to the lease so granted are to be read as references to the |
| |
| 10 |
| |
Profits of property businesses: other rules about receipts and deductions |
| |
Furnished accommodation: receipts and deductions |
| |
| |
(1) | In calculating the profits of a property business which consists of or includes a |
| 15 |
| |
(a) | any sum payable for the use of furniture is brought into account as a |
| |
| |
(b) | a deduction is allowed for expenses incurred in connection with the |
| |
| 20 |
(2) | But subsection (1) does not apply to receipts or expenses brought into account |
| |
in calculating the profits of a trade which consists of, or involves, making |
| |
furniture available for use in premises. |
| |
(3) | A furnished letting is a lease or other arrangement under which— |
| |
(a) | a sum is payable in respect of the use of premises, and |
| 25 |
(b) | the person entitled to the use of the premises is also entitled, in |
| |
connection with that use, to the use of furniture. |
| |
| |
(a) | “premises” includes a caravan and a houseboat, and |
| |
(b) | “sum” includes the value of any consideration. |
| 30 |
Treatment of receipts on acquisition of business |
| |
249 | Acquisition of business: receipts from transferor’s UK property business |
| |
(1) | This section applies if— |
| |
(a) | a person (“the transferor”) permanently ceased to carry on a UK |
| |
property business (including one within the charge to income tax) at |
| 35 |
| |
(b) | at that time the transferor transferred to another person (“the |
| |
transferee”) the right to receive sums arising from the carrying on of |
| |
any business (“the transferred business”) comprised in the transferor’s |
| |
UK property business, and |
| 40 |
(c) | the transferee subsequently carries on the transferred business. |
| |
| |
| |
|
| |
| |
| |
(a) | which the transferee receives as a result of the transfer, and |
| |
(b) | which are not brought into account in calculating the profits of the |
| |
transferor’s UK property business for corporation or income tax |
| |
purposes of any period before the cessation, |
| 5 |
| are brought into account in calculating the profits of the transferee’s UK |
| |
property business in the accounting period in which they are received. |
| |
(3) | Any sums mentioned in subsection (1)(b) which are received after the cessation |
| |
of the transferor’s property business are not post-cessation receipts (see |
| |
| 10 |
Reverse premiums as receipts |
| |
| |
(1) | This section applies if— |
| |
(a) | a company receives a reverse premium, and |
| |
(b) | the reverse premium is not brought into account under section 98(2) in |
| 15 |
calculating the profits of any trade carried on by the company. |
| |
(2) | The company is treated as— |
| |
(a) | entering into a transaction mentioned in section 205 (if the land to |
| |
which the property transaction relates is in the United Kingdom) or |
| |
section 206 (if that land is outside the United Kingdom), and |
| 20 |
(b) | receiving the reverse premium as a result of that transaction. |
| |
(3) | Accordingly, the reverse premium is brought into account as a receipt in |
| |
calculating the profits of the property business which consists of or includes |
| |
| |
(4) | Subsection (5) applies if— |
| 25 |
(a) | two or more of the parties to the property arrangements are connected |
| |
| |
(b) | the terms of those arrangements are not such as would reasonably have |
| |
been expected if those persons had been dealing at arm’s length. |
| |
(5) | The whole amount or value of the reverse premium is brought into account in |
| 30 |
the period of account in which the property transaction is entered into. |
| |
(6) | Expressions used in this section and sections 96 to 100 have the same meaning |
| |
in this section as they do in those sections. |
| |
Deductions for expenditure on energy-saving items |
| |
251 | Deduction for expenditure on energy-saving items |
| 35 |
(1) | This section applies if— |
| |
(a) | a company carries on a property business in relation to land which |
| |
consists of or includes a dwelling-house, |
| |
(b) | the company incurs expenditure in acquiring and installing an energy- |
| |
saving item in the dwelling-house or in a building containing the |
| 40 |
dwelling-house (see subsections (5) to (7)), |
| |
(c) | the expenditure is incurred before 1 April 2015, |
| |
| |
| |
|
| |
| |
(d) | a deduction for the expenditure is not prohibited by the wholly and |
| |
exclusively rule but would otherwise be prohibited by the capital |
| |
prohibition rule (see subsection (8)), and |
| |
(e) | no allowance under CAA 2001 may be claimed in respect of the |
| |
| 5 |
(2) | In calculating the profits of the business, a deduction for the expenditure is |
| |
| |
(3) | But any deduction is subject to— |
| |
(a) | section 252 (restrictions on relief), and |
| |
(b) | any provision made by regulations under section 253. |
| 10 |
(4) | If, on a just and reasonable apportionment of any expenditure, part of the |
| |
expenditure would qualify for the relief (but the remainder would not), a |
| |
deduction is allowed for that part. |
| |
(5) | “Energy-saving item” means an item of an energy-saving nature of such |
| |
description as is for the time being specified in regulations made by the |
| 15 |
| |
(6) | The Treasury may by regulations provide for an item to be an energy-saving |
| |
item only if it satisfies such conditions as may be— |
| |
| |
(b) | determined in accordance with, |
| 20 |
| |
(7) | The conditions may include conditions imposed by reference to information or |
| |
documents issued by any body, person or organisation. |
| |
| |
“the capital prohibition rule” means the rule in section 53 (capital |
| 25 |
expenditure), as applied by section 210, and |
| |
“the wholly and exclusively rule” means the rule in section 54 (expenses |
| |
not wholly and exclusively for trade and unconnected losses), as |
| |
| |
252 | Restrictions on relief |
| 30 |
(1) | This section restricts deductions that would otherwise be allowable under |
| |
| |
(2) | No deduction is allowed if, when the energy-saving item is installed, the |
| |
| |
(a) | is in the course of construction, or |
| 35 |
(b) | is comprised in land in which the company does not have an interest or |
| |
is in the course of acquiring an interest or further interest. |
| |
(3) | No deduction is allowed in respect of expenditure in an accounting period if— |
| |
(a) | the business consists of or includes the commercial letting of furnished |
| |
holiday accommodation (see Chapter 6), and |
| 40 |
(b) | the dwelling-house constitutes some or all of that accommodation for |
| |
| |
(4) | No deduction is allowed in respect of expenditure treated by section 61 (as |
| |
applied by section 210) as incurred on the date on which the company starts to |
| |
| |
| |
|
| |
| |
carry on the business unless the expenditure was incurred not more than 6 |
| |
| |
(5) | No deduction is allowed in respect of expenditure incurred in acquiring and |
| |
installing the energy-saving item in a building containing the dwelling-house |
| |
in so far as the expenditure is not for the benefit of the dwelling-house. |
| 5 |
| |
(1) | In relation to any deduction under section 251, the Treasury may make |
| |
| |
(a) | restricting or reducing the amount of expenditure for which the |
| |
| 10 |
(b) | excluding entitlement to the deduction in such cases as may be |
| |
specified in, or determined in accordance with, the regulations, |
| |
(c) | determining who is (and is not) entitled to the deduction if different |
| |
persons have different interests in land that consists of or includes the |
| |
whole or part of a building containing one or more dwelling-houses, |
| 15 |
(d) | making apportionments if the property business is carried on by |
| |
persons in partnership or an interest in land is beneficially owned by |
| |
persons jointly or in common. |
| |
(2) | The apportionments that may be made include apportionments to persons |
| |
within the charge to income tax. |
| 20 |
(3) | Regulations under this section may— |
| |
(a) | make different provision for different cases, and |
| |
(b) | contain incidental, supplemental, consequential and transitional |
| |
provision and savings (including provision as to appeals in relation to |
| |
apportionments mentioned in subsection (1)(d)). |
| 25 |
Deductions for expenditure on sea walls |
| |
254 | Deduction for expenditure on sea walls |
| |
(1) | This section applies if in a tax year a person — |
| |
(a) | is the owner or tenant of any premises, and |
| |
(b) | incurs expenditure in making a sea wall or other embankment |
| 30 |
necessary for the preservation or protection of the premises against the |
| |
encroachment or overflowing of the sea or any tidal river. |
| |
(2) | In calculating the profits of any property business (within the charge to tax |
| |
under Chapter 3) carried on by the person in relation to the premises, a |
| |
deduction is allowed for the expenditure in each tax year comprised in the |
| 35 |
| |
(3) | The deduction period comprises— |
| |
(a) | the tax year in which the expenditure is incurred, and |
| |
(b) | the next 20 tax years. |
| |
(4) | The amount of the deduction is 1/21 of the expenditure. |
| 40 |
(5) | The deduction is apportioned between the accounting period or periods |
| |
comprised in the tax year, but— |
| |
| |
| |
|
