Income Tax (Trading and Other Income) Act 2005

20 (1) Amend section 37 (premiums paid etc: deductions from premiums and rent received) as follows. U.K.

(2) In subsection (1)—

(a) omit “or” at the end of paragraph (a),

(b) after paragraph (b) insert—

“(c) any amount falls to be treated as a receipt of a UK property business by virtue of any of sections 277 to 282 of ITTOIA 2005 (receipts in respect of lease premiums, sums payable instead of rent, for surrender of lease and for variation or waiver of term of lease and assignments), or

(d) any amount would fall to be so treated but for the operation of the rule in section 288 of that Act (the additional calculation rule),”, and

(c) after “this section” insert “ and section 37A ”.

(3) In subsection (2)—

(a) for “person” substitute “ company ”, and

(b) for “he” substitute “ the company ”.

(4) In subsection (3)—

(a) for “person” substitute “ company ”, and

(b) for “he” substitute “ the company ”.

(5) In subsection (4)—

(a) for “the person” substitute “ a company which is ”, and

(b) for “he” substitute “ the company ”.

(6) In subsection (7)(b) after sub-paragraph (ii) insert—

“(iii) where it arose under Chapter 4 of Part 3 of ITTOIA 2005 (profits of property businesses: lease premiums etc.), shall be its receipt period (within the meaning of that Chapter (see section 288(6)).”

(7) In subsection (8) after “section 34(2)” insert “ or under section 277 of ITTOIA 2005 by virtue of section 278 of that Act (amount treated as lease premium where work required) ”.

(8) In subsection (9)—

(a) for “tax” substitute “ income tax or corporation tax ”, and

(b) at the end insert “ or if it has been deducted under the rule in section 288 of ITTOIA 2005 (the additional calculation rule) in calculating the amount of a receipt of a property business (within the meaning of that Act) under Chapter 4 of Part 3 of that Act. ”

(9) At end insert—

“(10) In the application of this section to Scotland the reference to a lease being granted out of the head lease is to the grant of a sublease of land subject to the head lease.”