F1Part 11ALeasing arrangements: finance leases and loans
F2Chapter 2Finance leases with return in capital form
Pt. 11A Ch. 2 inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 3 para. 3 (with Sch. 9 paras. 1-9, 22)
Relief for bad debts by reduction of cumulative rental excesses
614BNRelief for bad debts: reduction of cumulative normal rental excess
1
This section applies if in relation to the lease for any period of account of the current lessor—
a
there is a cumulative normal rental excess, and
b
a bad debt deduction falls to be made in respect of rent from the lease.
2
If for that period—
a
the accountancy rental earnings in the case of the lease do not exceed the normal rent, and
b
the amount of the bad debt deduction exceeds the amount of that rent,
the cumulative normal rental excess for that period is reduced by the amount of the excess of that deduction over that rent (but not so as to reduce the amount of that rental excess below nil).
3
Subsections (4) and (5) apply if for that period the accountancy rental earnings in relation to the lease exceed the normal rent.
4
The amount of the cumulative normal rental excess that may be set against the taxable rent for that period under section 614BK (reduction of taxable rent by the cumulative normal rental excess) is limited to the amount (if any) by which the accountancy rental earnings exceed the bad debt deduction.
5
If for that period the bad debt deduction exceeds the accountancy rental earnings, the cumulative normal rental excess for that period is reduced by the amount of the excess (but not so as to reduce the amount of that rental excess below nil).
6
In this section, in relation to a period of account of the lessor—
“bad debt deduction” has the meaning given in section 614BL(6), and
“taxable rent” has the meaning given in section 614BG(2).
Pt. 11A inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 3 para. 2 (with Sch. 9 paras. 1-9, 22)