Income Tax (Trading and Other Income) Act 2005

288The additional calculation ruleU.K.
This section has no associated Explanatory Notes

(1)The rule in this section applies if the conditions mentioned in section 287 are met.

(2)The additional calculation rule is that the amount given by the formula in section 277, 279, 280, 281 or 282 must be reduced by the amount calculated in accordance with this section in order to give the amount of the receipt under calculation.

(3)The amount of the reduction is—

(a)if there is one taxed receipt which has an unused amount, the basic relieving amount by reference to that receipt, and

(b)if there is more than one taxed receipt which has an unused amount, the total of the basic relieving amounts by reference to each receipt,

adjusted, if necessary, in the light of section 289(5) (reduction not to exceed amount being reduced).

(4)The basic relieving amount by reference to a taxed receipt is given by the formula—

where—

A is the unreduced amount of the taxed receipt (which is, generally, the amount given by the formula in section 277, 279, 280, 281 or 282, but see section 290(2) to (4)),

LRP is the receipt period of the receipt under calculation, and

TRP is the receipt period of the taxed receipt.

(5)But the basic relieving amount is different if section 289(2) or (4) applies (certain special cases).

(6)For the purposes of this Chapter, the “receipt period” of a receipt is—

(a)in the case of a receipt under section 277 or 280, the effective duration of the lease,

(b)in the case of a receipt under section 279, the period in relation to which the sum payable instead of rent is payable,

(c)in the case of a receipt under section 281, the period for which the variation or waiver has effect, and

(d)in the case of a receipt under section 282, the effective duration of the lease remaining at the date of the assignment.