Finance Act 2003

[F1 15 U.K. Whether an increase in rent is to be regarded for the purposes of paragraph 14 as abnormal is determined as follows:—

[F2 Step One

Find the start date. Where the provisions of paragraph 14 have not previously applied to an increase in the rent payable under the lease, the start date is—

(a) if paragraph (b) or (c) does not apply, the beginning of the term of the lease;

(b) if the amount of rent payable under the lease is determined under paragraph 7 (variable or uncertain rent), the beginning of the period by reference to which the rent assumed to be payable after the fifth year of the term of the lease is determined in accordance with paragraph 7(3);

(c) if there has been a variation in the lease falling within paragraph 13 (increase of rent treated as grant of new lease: variation of lease in first five years), the date of the variation (or, if there has been more than one such variation, the date of the most recent one).

Where the provisions of paragraph 14 have previously applied to an increase in the rent payable under the lease, the start date is the date of the last increase in relation to which the provisions of that paragraph applied.

Step Two

Find the number of whole years in the period between the start date and the date on which the new rent first becomes payable.

Step Three

The rent increase is regarded as abnormal if the excess rent (see paragraph 14(3)) is greater than:

where—

R is the rent previously taxed (see paragraph 14(4) or (4A)), and

Y is the number of whole years found under Step Two.]]

Textual Amendments

F1 Sch. 17A inserted (with effect in accordance with Sch. 39 para. 26 of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 22(2) (which amending provision re-enacts, subject to certain changes, a corresponding amendment made by the now revoked Stamp Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) Regulations 2003 (S.I. 2003/2816), see Sch. 39 para. 14) (with Sch. 39 paras. 11, 13(5))

F2 Sch. 17A para. 15 Step 1-3 substituted for Sch. 17A para. 15 Step 1-6 (with effect in accordance with Sch. 25 para. 9(5)(6) of the amending Act) by Finance Act 2006 (c. 25), Sch. 25 para. 8(1)