Corporation Tax Act 2010

[F1 [F2 269ZYZA Other relevant credits U.K.

(1) For the purposes of section 269ZX a “relevant remeasurement credit” is a credit, or other income, brought into account in respect of a relevant remeasurement excess.

(2) There is a “relevant remeasurement excess” where—

(a) a company (“C”) is the tenant under a lease of land (and “L” is the landlord),

(b) C’s accounts include a relevant right-of-use asset impairment loss in connection with the lease,

(c) under an arrangement (“C’s arrangement”) made at arm’s length, C’s obligations under the lease are varied or cancelled,

(d) as a result of C’s arrangement, C is required, for accounting purposes, to remeasure the lease liability in relation to the lease,

(e) the remeasurement results in the lease liability being reduced by an amount which exceeds the amount of the right-of-use asset recognised in relation to the lease (taking account of any right-of-use asset impairment loss), and

(f) the relevant requirements are met (see subsection (5)).

(3) For the purposes of section 269ZX a variable lease payment is “relevant” if it is a credit, or other income, brought into account in circumstances described in subsection (4).

(4) Those circumstances are where—

(a) a company (“C”) is the tenant under a lease of land (and “L” is the landlord),

(b) C’s accounts include a relevant right-of-use asset impairment loss in connection with the lease,

(c) under an arrangement (“C’s arrangement”) made at arm’s length, there is a change in the payments that would have been payable by C under the lease on or before 30 June 2022,

(d) the change would not have been made if it were not for coronavirus,

(e) for accounting purposes, C opts to record the change by means of variable lease payments (rather than by remeasuring its lease liability in relation to the lease), and

(f) the relevant requirements are met (see subsection (5)).

(5) For the purposes of subsections (2) and (4), the relevant requirements are met if—

(a) the requirements in section 269ZY(3)(b) and (c), or

(b) the requirements in section 269ZY(3)(c) and (5)(a), (b), (d) and (e),

are met in relation to C, L and C’s arrangement (as defined in subsection (2) or (4), as appropriate).

(6) In determining whether a company is required to account as described in subsection (2)(d), ignore any option the company has to account as described in subsection (4)(e).

(7) The Treasury may by regulations substitute for the date for the time being specified in subsection (4)(c) such later date as they consider appropriate.

(8) In this section—

• “coronavirus” means severe acute respiratory syndrome coronavirus 2;

• “lease liability”, in relation to a company and a lease, means a liability recognised in the company’s accounts to reflect the company’s obligations as tenant under the lease;

• “right-of-use asset”, in relation to a company and a lease, means an asset recognised in the company’s accounts to reflect the company’s right to use land as the tenant under the lease;

• “relevant right-of-use impairment loss” has the meaning given in section 269ZY(2A).]]

Textual Amendments

F1 Pt. 7ZA inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 16

F2 S. 269ZYZA inserted (with effect in accordance with s. 30(17)-(19) of the amending Act) by Finance Act 2022 (c. 3), s. 30(14)