[F1[F218A(1)Where, under arrangements made in connection with the grant of a lease—U.K.
(a)the lessee, or any person connected with him or acting on his behalf, pays a deposit, or makes a loan, to any person, and
(b)the repayment of all or part of the deposit or loan is contingent on anything done or omitted to be done by the lessee or on the death of the lessee,
the amount of the deposit or loan (disregarding any repayment) is to be taken for the purposes of this Part to be consideration other than rent given for the grant of the lease.
(2)Where, under arrangements made in connection with the assignment of a lease—
(a)the assignee, or any person connected with him or acting on his behalf, pays a deposit, or makes a loan, to any person, and
(b)the repayment of all or part of the deposit or loan is contingent on anything done or omitted to be done by the assignee or on the death of the assignee,
the amount of the deposit or loan (disregarding any repayment) is to be taken for the purposes of this Part to be consideration other than rent given for the assignment of the lease.
(3)Sub-paragraph (1) or (2) does not apply in relation to a deposit if the amount that would otherwise fall within the sub-paragraph in question in relation to the grant or (as the case requires) assignment of the lease is not more than twice the relevant maximum rent.
(4)The relevant maximum rent is—
(a)in relation to the grant of a lease, the highest amount of rent payable in respect of any consecutive twelve month period in the first five years of the term;
(b)in relation to the assignment of a lease, the highest amount of rent payable in respect of any consecutive twelve month period in the first five years of the term remaining outstanding as at the date of the assignment,
the highest amount of rent being determined (in either case) in the same way as the highest amount of rent mentioned in paragraph 7(3).
(5)Tax is not chargeable by virtue of this paragraph—
(a)merely because of paragraph [F39A] of Schedule 5 (which excludes the 0% band in [F4Table B] in section 55(2) in cases where [F5the relevant rent attributable to non-residential property is not less than £1,000] a year), or
F6(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)[F7Section 1122 of the Corporation Tax Act 2010] (connected persons) has effect for the purposes of this paragraph.]]
Textual Amendments
F1Sch. 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))
F2Sch. 17A para. 18A and cross-heading inserted (with effect in accordance with Sch. 10 para. 16(5)-(9) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 10 para. 14
F3Word in Sch. 17A para. 18A(5)(a) substituted (with effect in accordance with s. 95(13) of the amending Act) by Finance Act 2008 (c. 9), s. 95(12)(a)
F4Words in Sch. 17A para. 18A(5)(a) substituted (with effect in accordance with s. 95(13) of the amending Act) by Finance Act 2008 (c. 9), s. 95(12)(b)
F5Words in Sch. 17A para. 18A(5)(a) substituted (with effect in accordance with s. 95(13) of the amending Act) by Finance Act 2008 (c. 9), s. 95(12)(c)
F6Sch. 17A para. 18A(5)(b) omitted (with effect in accordance with Sch. 39 para. 10(4) of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 39 para. 8(2)(b)(iii) (with Sch. 39 paras. 11-13)
F7Words in Sch. 17A para. 18A(6) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 419 (with Sch. 2)