Overview
980.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.
981.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.
982.In substance, however, the lump sum is a loan and the additional rent represents the repayment of principal and interest.
983.Where the Chapter applies, a proportion of the lump sum is to be treated as income of the recipient.
984.The Chapter corresponds to Chapter 2 of Part 19 of CTA 2010, which makes similar provision for the purposes of corporation tax. It has the following structure.
Section 681B summarises the Chapter.
Section 681BA states when the Chapter applies.
Sections 681BB and 681BC tax some or all of the consideration as income.
Section 681BD concerns relief for rent under the new lease.
Sections 681BE to 681BI deal with cases in which the new lease is deemed to end.
Section 681BJ deals with a case in which a lease is varied to provide for increased rent.
Sections 681BK to 681BM are interpretative.