Finance Act 1963

Deductions from rents: premiums etc.

8 (1) Where in relation to any premises—

(a) tax has become chargeable under the provisions of section 22 (except subsection (6)), 23 or 24 of this Act on any amount (disregarding any reduction in that amount under this paragraph), or

(b) tax would have become so chargeable on that amount but for the operation of section 22(6) of this Act or this paragraph, or but for any exemption from tax,

and, in respect of a lease granted out of, or disposition of, the lease, estate or interest in respect of which tax so became or would have become chargeable on the said amount (in this and the two following paragraphs referred to as " the amount chargeable on the superior interest"), a person would apart from this paragraph be chargeable under the said provisions on any amount (in this and the following paragraph referred to as " the later chargeable amount"), the amount on which he is so chargeable shall, where no claim is or can be made by him under section 22(6) of this Act, be the excess (if any) of the later chargeable amount over the appropriate fraction of the amount chargeable on the superior interest.

(2) Where a person would apart from this paragraph be so chargeable in respect of a lease or disposition which extends to a part only of the said premises, the amount on which he is so chargeable shall, where no claim is or can be made by him under section 22(6) of this Act, be the excess (if any) of the later chargeable amount over so much of the appropriate fraction of the amount chargeable on the superior interest as, on a just apportionment, is attributable to that part of the premises.

(3) For the purposes of this and the following paragraph the appropriate fraction of the amount chargeable on the superior interest is the sum which bears to that amount the same proportion as the period in respect of which the later chargeable amount arose bears to the period in respect of which the amount chargeable on the superior interest arose, and for those purposes the period in respect of which an amount arose—

(a) where it arose under section 22 of this Act, shall be the period treated in computing the amount as being the duration of the lease; or

(b) where it arose under section 23 of this Act, shall be the period treated in computing the amount as being the duration of the lease remaining at the date of the assignment, or

(c) where it arose under section 24 of this Act, shall be the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.

9 (1) Where in relation to any premises tax has or would have become chargeable as mentioned in sub-paragraph (1)(a) or (b) of the foregoing paragraph in respect of a lease, estate or interest, then, subject to the provisions of the following sub-paragraph, the person for the time being entitled to the lease, estate or interest shall be treated for the purpose of deductions under the foregoing provisions of this Schedule from rent receivable by him in respect of those or other premises as paying rent for those premises (in addition to any actual rent), becoming due from day to day, during any part of the period in respect of which the amount chargeable on the superior interest arose for which he was entitled to the lease, estate or interest, and in all bearing to that amount the same proportion as that part of the period bears to the whole.

(2) Where the foregoing paragraph has effect in relation to a lease granted out of, or disposition of, the lease, estate or interest in respect of which tax has or would have become so chargeable, sub-paragraph (1) above shall apply for the period in respect of which the later chargeable amount arose only if the appropriate fraction of the amount chargeable on the superior interest exceeds the later chargeable amount, and shall then apply as if the amount chargeable on the superior interest were reduced in the proportion which the said excess bears to the said appropriate fraction :

Provided that where the lease so granted, or the said disposition, extends to a part only of the premises, sub-paragraph (1) above and this sub-paragraph shall be applied separately in relation to that part and to the remainder of the premises, but as if for any reference to the amount chargeable on the superior interest there were substituted a reference to that amount proportionately adjusted.

10 (1) Where the amount chargeable on the superior interest arose under section 22(2) of this Act by reason of an obligation which included the carrying out of work in respect of which any allowance has fallen or will fall to be made under Part )( or Part )(I of the Act of 1952, paragraphs 8 and 9 of this Schedule shall apply as if the obligation had not included the carrying out of that work and the said amount had been calculated accordingly.

(2) Where an amount relevant for the purposes of paragraph 8 or 9 of this Schedule arose under section 24 of this Act and the reconveyance or grant in question takes place at a price different from that taken in calculating the amount or on a date different from that taken in determining the period in respect of which the amount arose, that paragraph shall be deemed to have had effect (for all relevant years of assessment) as it would have had effect if the actual price or date had been so taken, and such adjustment of liability to tax shall be made, by means of an additional assessment or otherwise, as may be necessary and may be so made at any time at which it could be made if it related only to tax for the year of assessment in which the reconveyance or grant takes place.