Overview
2502.This Chapter is based on section 780 of ICTA. It deals with the situation where the existing occupier of premises incurs additional rental liability in return for the payment of a lump sum.
2503.In form, the lump sum is the consideration received for assigning the lease, usually to a charity or a pension fund, and the lease-back is at an increased rent.
2504.In substance, however, the lump sum is a loan and the additional rent represents the repayment of principal and interest.
2505.Where the Chapter applies, a proportion of the lump sum is to be treated as income of the recipient.
2506.The Chapter has the following structure.
Section 849 summarises the Chapter.
Section 850 states when the Chapter applies.
Sections 851 and 852 tax some or all of the consideration as income.
Section 853 concerns relief for rent under the new lease.
Sections 854 to 858 deal with cases in which the new lease is deemed to end.
Section 859 deals with a case in which a lease is varied to provide for increased rent.
Sections 860 to 862 are interpretative.
