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Application of the Chapter |
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835 | Transferor or associate becomes liable for payment of rent |
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(1) | Section 838 has effect if— |
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(a) | land, or an estate or interest in land, is transferred, |
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(b) | the transferor, or a company associated with the transferor, becomes |
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liable to make a payment of rent under a lease of the land or part of it, |
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(c) | a deduction by way of relevant corporation tax relief (see section 837) |
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is allowed for the payment. |
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(2) | Section 839 has effect if— |
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(a) | land, or an estate or interest in land, is transferred, |
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(b) | the transferor, or a company associated with the transferor, becomes |
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liable to make a payment of rent under a lease of the land or part of it, |
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(c) | a deduction under section 76 of ICTA (expenses of insurance |
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companies) is allowed for the payment. |
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(3) | The reference in subsection (1)(a) or (2)(a) to a transfer of an estate or interest |
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in land includes a reference to any of the following— |
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(a) | the granting of a lease or another transaction involving the creation of |
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a new estate or interest in the land, |
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(b) | the transfer of the lessee’s interest under a lease by surrender or |
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forfeiture of the lease, and |
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(c) | a transaction or series of transactions affecting land or an estate or |
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interest in land, such that some person is the owner or one of the |
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owners before and after the transaction or transactions but another |
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person becomes or ceases to be one of the owners. |
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(4) | In relation to a transaction or series of transactions mentioned in subsection |
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(3)(c), a person is to be regarded as a transferor for the purposes of this Chapter |
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(a) | is an owner before the transaction or transactions, and |
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(b) | is not the sole owner afterwards. |
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(5) | The liability mentioned in subsection (1)(b) or (2)(b) is one resulting from— |
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(a) | a lease of the land or part of it granted (at the time of the transfer or |
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later) by the transferee to the transferor, or |
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(b) | another transaction or series of transactions affecting the land or an |
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estate or interest in it. |
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(6) | The liability mentioned in subsection (1)(b) or (2)(b) is one arising at the time |
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of the transfer or later. |
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(7) | The reference in subsection (1)(a) or (2)(a) to a transfer does not include a |
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transfer on or before 14 April 1964. |
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836 | Transferor or associate becomes liable for payment other than rent |
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(1) | Section 838 has effect if— |
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(a) | land, or an estate or interest in land, is transferred, |
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|
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(b) | the transferor, or a company associated with the transferor, becomes |
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liable to make a payment which is not rent under a lease but is |
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otherwise connected with the land or part of it (whether it is a payment |
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under a rentcharge or under some other transaction), and |
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(c) | a deduction by way of relevant corporation tax relief (see section 837) |
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is allowed for the payment. |
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(2) | Section 839 has effect if— |
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(a) | land, or an estate or interest in land, is transferred, |
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(b) | the transferor, or a company associated with the transferor, becomes |
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liable to make a payment which is not rent under a lease but is |
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otherwise connected with the land or part of it (whether it is a payment |
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under a rentcharge or under some other transaction), and |
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(c) | a deduction under section 76 of ICTA (expenses of insurance |
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companies) is allowed for the payment. |
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(3) | The reference in subsection (1)(a) or (2)(a) to a transfer of an estate or interest |
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in land includes a reference to any of the following— |
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(a) | the granting of a lease or another transaction involving the creation of |
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a new estate or interest in the land, |
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(b) | the transfer of the lessee’s interest under a lease by surrender or |
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forfeiture of the lease, and |
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(c) | a transaction or series of transactions affecting land or an estate or |
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interest in land, such that some person is the owner or one of the |
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owners before and after the transaction or transactions but another |
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person becomes or ceases to be one of the owners. |
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(4) | In relation to a transaction or series of transactions mentioned in subsection |
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(3)(c), a person is to be regarded as a transferor for the purposes of this Chapter |
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(a) | is an owner before the transaction or transactions, and |
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(b) | is not the sole owner afterwards. |
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(5) | The liability mentioned in subsection (1)(b) or (2)(b) is one resulting from a |
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transaction or series of transactions affecting the land or an estate or interest in |
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(6) | The liability mentioned in subsection (1)(b) or (2)(b) is one arising at the time |
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of the transfer or later. |
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(7) | The reference in subsection (1)(a) or (2)(a) to a transfer does not include a |
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transfer on or before 14 April 1964. |
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837 | Relevant corporation tax relief |
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For the purposes of this Chapter each of the following is a deduction by way of |
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relevant corporation tax relief— |
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(a) | a deduction in calculating profits or losses of a trade for corporation tax |
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(b) | a deduction in calculating the profits of a UK property business for |
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corporation tax purposes, |
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(c) | a deduction in calculating any loss for which relief is given under |
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section 91 (losses from miscellaneous transactions), or in calculating |
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profits or gains chargeable to corporation tax under or by virtue of any |
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provision to which section 1173 (miscellaneous charges) applies, and |
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(d) | a deduction under section 1219 of CTA 2009 (expenses of management |
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of a company’s investment business). |
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Relief (other than for certain insurance company expenses): restriction and carrying forward |
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838 | Relevant corporation tax relief: deduction not to exceed commercial rent |
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(1) | The rules in subsection (3) apply to the calculation of the deduction by way of |
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relevant corporation tax relief allowed in an accounting period— |
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(a) | for the non-excluded element of the payment within section 835(1) or |
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(b) | if there are two or more such payments, for the non-excluded elements |
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(2) | For the purposes of this section the non-excluded element of a payment is the |
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element of the payment not excluded under section 843 (service charges etc). |
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| Rule 1 —meaning of amount E |
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| For any accounting period, amount E (which may be nil) is the expense or total |
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expenses to be brought, in accordance with generally accepted accounting |
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practice, into account in the period in respect of— |
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(a) | the non-excluded element of the payment, or |
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(b) | the non-excluded elements of the payments. |
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| For every accounting period— |
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(a) | calculate the total of amount E for the period and amount E for every |
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previous accounting period ending on or after the date of the transfer |
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mentioned in section 835(1)(a) or 836(1)(a), |
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(b) | calculate the total of the deductions by way of relevant corporation tax |
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relief for every previous accounting period ending on or after the date |
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(c) | subtract the total at (b) from the total at (a) to give the cumulative |
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unrelieved expenses for the period. |
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| Rule 3 — meaning of post-spread period |
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| An accounting period is a post-spread period if for that accounting period, and |
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every later accounting period, there are no payments within section 835(1) or |
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| Rule 4 — the deduction allowed in an accounting period |
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| If an accounting period is not a post-spread period, the deduction allowed for |
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the period is equal to the cumulative unrelieved expenses for the period, but is |
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equal to the commercial rent for the period if that is less (see section 844 or 845). |
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| Rule 5 — accounting periods in which no deduction allowed |
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| If an accounting period is a post-spread period, no deduction is allowed for the |
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Insurance company expenses: restriction and carrying forward of relief |
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839 | Deduction under section 76 of ICTA not to exceed commercial rent |
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(1) | Subsection (3) applies to the calculation of the deduction under section 76 of |
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ICTA allowed for the non-excluded element of the payment within section |
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(2) | For the purposes of this section the non-excluded element of a payment is the |
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element of the payment not excluded under section 843 (service charges etc). |
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(3) | The deduction must not exceed the commercial rent for the period for which |
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the payment is made (see section 844 or 845). |
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840 | Carrying forward parts of payments |
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(1) | This section applies if— |
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(a) | section 839 has effect, and |
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(b) | conditions A and B are met. |
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(2) | Condition A is that under section 839 part of a payment which would |
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otherwise be allowed as a deduction under section 76 of ICTA is not allowed. |
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(3) | Condition B is that one or more later payments are made, by the transferor or |
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a person associated with the transferor, under— |
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(a) | the lease (if section 839 has effect because of section 835(2)), or |
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(b) | the rentcharge or other transaction mentioned in section 836(2)(b) (if |
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section 839 has effect because of section 836(2)). |
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(4) | The part of the payment mentioned in subsection (2) may be carried forward |
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and treated for the purposes of a deduction under section 76 of ICTA as if it |
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(a) | when the next of the later payments is made, and |
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(b) | for the period for which that later payment is made. |
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(5) | So far as a part of a payment carried forward under this section is not allowed |
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as a deduction under section 76 of ICTA, it may be carried forward again under |
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841 | Aggregation and apportionment of payments |
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(1) | This section applies for the purposes of section 839. |
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(2) | If more than one payment is made for the same period the payments must be |
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(3) | If payments are made for periods which overlap— |
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(a) | the payments must be apportioned, and |
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(b) | the apportioned payments which belong to the common part of the |
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overlapping periods must be taken together. |
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(4) | References in subsections (2) and (3) to payments include references to parts of |
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payments which under section 840 are treated as if made later than they were |
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