Textual Amendments
F1Pt. 12A inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 4 para. 2 (with Sch. 9 paras. 1-9, 22)
Textual Amendments
F2Pt. 12A Ch. 3 inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 4 para. 4 (with Sch. 9 paras. 1-9, 22)
(1)The rules in subsection (3) apply to the calculation of the deduction by way of relevant income tax relief allowed in a relevant period—
(a)for the non-excluded element of the payment within section 681CB(2), or
(b)if there are two or more such payments, for the non-excluded elements of those payments.
(2)For the purposes of this section—
(a)“relevant period” means—
(i)a period of account of the trade, or
(ii)if no accounts of the trade are drawn up for a period, the basis period of a tax year, and
(b)the non-excluded element of a payment is the element of the payment not excluded under section 681CD (long funding finance leases).
(3)The rules are—
Rule 1 —meaning of amount E For any relevant period, amount E (which may be nil) is the expense or total expenses to be brought, in accordance with generally accepted accounting practice, into account in the period in respect of—
the non-excluded element of the payment, or
the non-excluded elements of the payments.
Rule 2 — calculations For every relevant period—
calculate the total of amount E for the period and amount E for every previous relevant period ending on or after the date of the creation of the lease mentioned in section 681CB(2)(a),
calculate the total of the deductions by way of relevant income tax relief for every previous relevant period ending on or after that date, and
subtract the total at (b) from the total at (a) to give the cumulative unrelieved expenses for the period.
Rule 3 — meaning of post-spread period A relevant period is a post-spread period if for that relevant period, and every later relevant period, there are no payments within section 681CB(2).
Rule 4 — the deduction allowed in a relevant period If a relevant period is not a post-spread period, the deduction allowed for the period is equal to the cumulative unrelieved expenses for the period, but is the commercial rent for the period if that is less (see section 681CE).
Rule 5— relevant periods in which no deduction allowed If a relevant period is a post-spread period, no deduction is allowed for the period.
(1)This section applies for the purposes of section 681CC.
(2)A payment must be excluded so far as, in the case of the lessee, it is to be regarded in accordance with Chapter 6A of Part 2 of CAA 2001 as a payment under a lease which is a long funding finance lease for the purposes of that Part.
(1)Subsection (3) applies for the purpose of making a comparison under rule 4 of section 681CC(3).
(2)In this section “the actual lease” means the lease mentioned in section 681CB(2)(a).
(3)The commercial rent is the rent which might at the relevant time be expected to be paid under a lease of the asset if—
(a)the lease were for the rest of the asset's expected normal working life,
(b)the rent were payable at uniform intervals and at a uniform rate, and
(c)the rent gave a reasonable return for the asset's market value at the relevant time, taking account of the actual lease's terms and conditions.
(4)The relevant time is the time when the actual lease was created.
(5)An asset's expected normal working life is the period which might be expected, when it is first put into use, to pass before it is finally put out of use as being unfit for further use.
(6)In applying subsection (5) it must be assumed that the asset will be used in the normal way, and to the normal extent, throughout the period.
(7)If the asset is used at the same time partly for the purposes of the trade mentioned in section 681CB(2)(b) and partly for other purposes, the commercial rent as defined in subsection (3) is to be determined by reference to what would be paid for such partial use.]