Overview
1031.This Chapter is based on sections 782 and 785 of ICTA.
1032.This Chapter applies where a person carrying on a trade, profession or vocation pays rent under a lease of an asset other than land or buildings and at any time before the lease was created the asset was used either (a) in that trade, profession or vocation or (b) in another trade, profession or vocation carried on by the person who then or later was carrying on the first trade, profession or vocation and, in either case, when so used was owned by the person carrying on the trade, profession or vocation in which it was used.
1033.If this Chapter applies, it provides that in computing the profits and gains of the trade, profession or vocation the deduction in respect of a payment under the lease must not exceed the commercial rent of the asset for the period for which the payment was made.
1034.This Chapter corresponds to Chapter 3 of Part 19 of CTA 2010, which makes similar provision for the purposes of corporation tax. It has the following structure.
Section 681C summarises the Chapter.
Sections 681CA and 681CB state when the Chapter applies.
Section 681CC restricts income tax relief and carries forward relief which has been denied.
Sections 681CD and 681CE supplement section 681CC.
Sections 681CF and 681CG are interpretative.