Chapter 9 Rent receivable for UK electric-line wayleaves
Overview
1398.This Chapter rewrites the Schedule D Case VI charge on rent received in respect of a wayleave granted in the United Kingdom. It is based on section 120 of ICTA.
1399.If a landowner receives rent in respect of a UK electric-line wayleave section 120 of ICTA provides that:
the rent is charged under Schedule A if the landowner receives other rent in respect of the same land; otherwise
the rent is charged under Schedule D.
1400.In practice this means that if the landowner carries on a trade on the land the rent can be treated as a trade receipt. See Change 5 in Annex 1. Otherwise the rent is taxed under Schedule D Case VI.
1401.Section 392 of ICTA gives the rules for dealing with Schedule D Case VI losses. In order to preserve that loss regime it is necessary to isolate the income that ICTA charges under Schedule D Case VI.
Section 344: Charge to tax on rent receivable for a UK electric-line wayleave
1402.This section charges to tax rent receivable for a UK electric-line wayleave to tax. It is based on section 120 of ICTA.
Section 345: Meaning of “rent receivable for a UK electric-line wayleave”
1403.This section provides the definition of “rent receivable for a UK electric-line wayleave”. It is based on section 120(1) and (5) of ICTA.
1404.Section 120(1) of ICTA identifies the right in respect of which the rent is payable as an “easement”. Section 120(5) of ICTA cross-refers to the definition of “easement” in section 119(3) of ICTA. Section 119 of ICTA is rewritten as Chapter 8 of this Part. As explained in the commentary on section 22 both this Chapter and section 22 use the term “wayleave” to describe the right in respect of which the rent is received. In practice this is how most of the payments covered by this section are usually described. But the generality of the words in section 119(3) of ICTA has not been lost. The section also uses the Scottish term for “easement”, “servitude”.
1405.Subsection (2) clarifies the meaning of “electric, telegraph or telephone wire or cable”. It does not repeat the reference to “transformer” in the source legislation. In its context it is clear that “apparatus” would include “transformer”.
Section 346: Extent of charge to tax
1406.This section sets out the two exceptions under which the rent received in respect of a UK electric-line wayleave is not taxed under this Chapter. It is based on section 120(1A) of ICTA.
1407.Subsections (1) and (2) deal with the case in which the taxpayer receives other rent in respect of the land except rent from another wayleave. The rent from the wayleave is taxed as property income.
1408.Subsections (3) and (4) deal with the case in which the taxpayer carries on a trade on the land. See Change 5 in Annex 1. The rent may be taxed as a trade receipt.
Section 347: Income charged
1409.This section sets out the amount charged to tax. It is based on section 69 of ICTA.
Section 348: Person liable
1410.This section states who is liable for any tax charged. It is based on section 59 of ICTA.
