62(1)This paragraph applies if—U.K.
(a)a period of account of a property business begins before 6th April 2005 and ends on or after that date, and
(b)in order to arrive at the profits or losses of a tax year before the tax year 2005-06 it is necessary to apportion the profits or losses of the period of account to any part of that period falling in a tax year before the tax year 2005-06.
(2)The profits or losses of the period of account—
(a)are calculated in accordance with Part 3 of this Act (and therefore, to that extent, that Part has effect for tax years before the tax year 2005-06), and
(b)may be apportioned in accordance with section 275 to any part of the period of account falling in a tax year before the tax year 2005-06.
63U.K.Section 277 does not apply in relation to a lease granted pursuant to a contract entered into before 4th April 1963.
64U.K.Section 279 does not apply in relation to a lease granted—
(a)before 6th April 1963, or
(b)pursuant to a contract entered into before 4th April 1963.
65U.K.Section 280 does not apply in relation to a lease granted—
(a)before 6th April 1963, or
(b)pursuant to a contract entered into before 4th April 1963.
66U.K.Section 282 does not apply in relation to a lease granted —
(a)before 6th April 1963, or
(b)pursuant to a contract entered into before 4th April 1963.
67(1)This paragraph relates to the operation of sections 287 to 298 where, in respect of a lease—U.K.
(a)there is a receipt of a Schedule A business or an overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) as a result of section 34 or 35 of ICTA (treatment of premiums etc. as rent and assignments for profit of lease granted at an undervalue) for a tax year before the tax year 2005-06 or an accounting period ending before 6th April 2005, or
(b)there would be such a receipt, but for the operation of section 37(2) or (3) of ICTA (reductions in certain receipts under section 34 or 35 of ICTA).
In this paragraph and paragraphs 68 and 69 such a receipt is referred to as a “pre-commencement receipt”.
(2)For the purposes of Chapter 4 of Part 3—
(a)the lease is treated as a taxed lease, and
(b)the pre-commencement receipt is treated as a taxed receipt.
(3)For the purposes of that Chapter, the “receipt period” of a taxed receipt which is a pre-commencement receipt is—
(a)in the case of a pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and
(b)in the case of a pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.
(4)For the purposes of that Chapter the “unreduced amount” of a taxed receipt which is a pre-commencement receipt is the amount of the pre-commencement receipt as a result of section 34 or 35 of ICTA, before the operation of section 37(2) or (3) of ICTA.
(5)Sub-paragraph (6) applies to a taxed receipt which is a pre-commencement receipt arising as a result of section 34(2) of ICTA (obligation on tenant to carry out work under lease).
(6)If the obligation to carry out work included the carrying out of work which gave or will give rise to expenditure for which an allowance has been, or may be, made under the enactments relating to capital allowances, the unreduced amount of the taxed receipt is calculated as if the obligation had not included the carrying out of that work.
68(1)This paragraph applies if—U.K.
(a)in calculating the amount of a pre-commencement receipt, there is a reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section, and
(b)as a result of paragraph 67 the amount chargeable on the superior interest is the taxed receipt for the purposes of Chapter 4 of Part 3.
(2)References to a reduction under section 37(2) or (3) of ICTA in a pre-commencement receipt by reference to the amount chargeable on the superior interest are to the difference between—
(a)the amount of the pre-commencement receipt before the operation of section 37(2) or (3) of ICTA, and
(b)the amount of the receipt after the operation of that subsection,
so far as attributable to the amount chargeable on the superior interest for the purposes of section 37 of ICTA.
(3)In sections 290(5)(a) (meaning of “unused amount”) and 295(1)(a) (limit on reductions and deductions) references to reductions under section 288 by reference to the taxed receipt include references to reductions under section 37(2) or (3) of ICTA in pre-commencement receipts by reference to the amount chargeable on the superior interest.
(4)Sections 292 to 294 apply as follows—
(a)the pre-commencement receipt is treated as if it were a lease premium receipt for the purposes of sections 293 and 294,
(b)references in those sections to the reduction under section 288 by reference to the taxed receipt are, in relation to the pre-commencement receipt, to the reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest, and
(c)for the purposes of those sections the receipt period of the pre-commencement receipt is—
(i)in the case of a pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and
(ii)in the case of a pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.
69(1)Sub-paragraph (2) applies if—U.K.
(a)in calculating the profits of a trade, profession or vocation for a tax year before the tax year 2005-06 or an accounting period ending before 6th April 2005, a person is treated as paying rent under section 87(2) of ICTA by reference to the amount chargeable for the purposes of that section, and
(b)as a result of paragraph 67 the amount chargeable is the taxed receipt for the purposes of Chapter 4 of Part 3.
(2)References in sections 290(5)(b) and 295(2)(b) to the deductions allowed for expenses under section 61 by reference to the taxed receipt include references to the deductions allowed in calculating the profits of the trade, profession or vocation for the rent that the person is treated as paying under section 87(2) of ICTA by reference to the amount chargeable.
(3)Sub-paragraph (4) applies if—
(a)in calculating the profits of a Schedule A business or an overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) for a tax year before the tax year 2005-06 or an accounting period ending before 6th April 2005, a person is treated as paying rent as a result of section 37(4) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section, and
(b)as a result of paragraph 67 the amount chargeable on the superior interest is the taxed receipt for the purposes of Chapter 4 of Part 3.
(4)References in sections 290(5)(c) and 295(1)(b) to the deductions allowed for expenses under section 292 by reference to the taxed receipt include references to the deductions allowed in calculating the profits of the Schedule A business or overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) for the rent that the person is treated as paying as a result of section 37(4) of ICTA by reference to the amount chargeable on the superior interest.
70(1)In relation to a lease granted after 12th June 1969 and before 25th August 1971, for sections 303 and 304 substitute—U.K.
(1)The following rules apply for determining the effective duration of a lease for the purposes of this Chapter.
Rule 1: Where the terms of a lease include provision for the determination of the lease by notice given by the landlord, the lease is not to be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice so given.
Rule 2: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted, if the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date.
Rule 3: Where the terms of the lease include provision for the extension of the lease beyond a given date by notice given by the tenant, account may be taken of any circumstances making it likely that the lease will be so extended.
(2)Rule 2 applies by reference to the facts known or ascertainable at the time of the grant of the lease.
(3)In applying the rules, it is assumed that all parties concerned, whatever their relationship, act as if they were at arm's length.
(4)In this section, in relation to Scotland, “term”, where referring to the duration of a lease, means period.”
(2)This paragraph does not apply if the determination is for the purposes of section 281 (sums payable for variation or waiver of [F1terms] of lease).
Textual Amendments
F1Word in Sch. 2 para. 70(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 646(2) (with Sch. 2 Pts. 1, 2)
71(1)In relation to a lease granted before 13th June 1969, for sections 303 [F2and 304] substitute—U.K.
(1)The following rules apply for determining the effective duration of a lease for the purposes of this Chapter.
Rule 1: Where the effective duration of a lease is being determined after the date on which the lease has for any reason come to an end, the duration is taken to have extended from its commencement to that date.
Rule 2: Where the terms of the lease include provision for the determination of the lease by notice given either by the landlord or by the tenant, the lease is not to be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice.
Rule 3: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted, if the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date.
(2)Rules 2 and 3 are subject to rule 1.
(3)Rules 2 and 3 apply in accordance with circumstances prevailing at the time of the determination.
(4)In this section, in relation to Scotland, “term”, where referring to the duration of a lease, means period.”
(2)This paragraph does not apply if the determination is for the purposes of section 281 (sums payable for variation or waiver of [F3terms] of lease).
Textual Amendments
F2Words in Sch. 2 para. 71(1) substituted (13.8.2009) by The Finance Act 2009, Schedule 47 (Consequential Amendments) Order 2009 (S.I. 2009/2035), art. 1, Sch. para. 45
F3Word in Sch. 2 para. 71(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 646(3) (with Sch. 2 Pts. 1, 2)
72(1)Section 311 does not apply to a reverse premium—U.K.
(a)which was received before 9th March 1999, or
(b)to which the recipient was entitled immediately before that date.
(2)In determining whether a reverse premium was one to which the recipient was entitled immediately before 9th March 1999, no account is to be taken of any arrangements made on or after that date.
73U.K.Sections 312 to 314 do not apply to expenditure incurred before 6th April 2004.
74(1)Subject to sub-paragraph (4), Chapter 6 of Part 3 applies before 6th April 2006 with the following amendments.U.K.
(2)In section 322(2)—
(a)after paragraph (b) insert—
“(ba)section 623(2)(c) or 644(2)(c) of ICTA (income regarded as relevant earnings for pension purposes: see section 504A of that Act),”,
(b)at the end of paragraph (d) insert “ and ”, and
(c)omit paragraph (f) and the word “and” before it.
(3)In section 328(2)—
(a)before paragraph (a) insert—
“(aa)income regarded as relevant earnings for pension purposes under section 623(2)(c) or 644(2)(c) of ICTA, or”, and
(b)omit paragraph (b) and the word “or” before it.
(4)The power of the Treasury to make an order under section 281 or 283 of FA 2004 has effect as if Schedule 35 to that Act contained amendments substituting sections 322(2) and 328(2) of this Act for those subsections as amended by sub-paragraphs (2) and (3) above.
75(1)Subject to sub-paragraph (3), section 504A of ICTA (as inserted by Schedule 1 to this Act) applies before 6th April 2006 with the following amendment.U.K.
(2)In subsection (2)—
(a)after paragraph (a) insert—
“(ab)section 623(2)(c) or 644(2)(c) (income regarded as relevant earnings for pension purposes), and”, and
(b)omit paragraph (c) and the word “and” before it.
(3)The power of the Treasury to make an order under section 281 or 283 of FA 2004 has effect as if Schedule 35 to that Act contained an amendment substituting section 504A of ICTA (as inserted by Schedule 1 to this Act) for that section as amended by sub-paragraph (2) above.
76(1)Chapter 7 of Part 3 applies to a change of basis taking effect for a period of account which ends on or after 6th April 2005.U.K.
(2)For this purpose the period of account for which a change of basis takes effect is the first period of account for which the new basis is adopted.
77U.K.The definition of “mineral royalties” in section 341(2) does not include any rent receivable before 6th April 1970.