Part 3

Industrial buildings allowances
Chapter 7

Balancing adjustments

Qualifying enterprise zone expenditure: effect of realising capital value

Capital value that is attributable to subordinate interest
329
1
Capital value is attributable to the subordinate interest if it is paid—
a
in consideration of the grant of the subordinate interest,
b
instead of any rent payable by the person entitled to the subordinate interest,
c
in consideration of the assignment of such rent, or
d
in consideration of—
i
the surrender of the subordinate interest, or
ii
the variation or waiver of any of the terms on which it was granted.
2
If—
a
no premium is given in consideration of the grant of the subordinate interest or any premium so given is less than the commercial premium, and
b
no commercial rent is payable in respect of the subordinate interest,
capital value is attributable under subsection (1)(a) as if the commercial premium had been paid on and in consideration of the grant of the subordinate interest.
3
If any value given instead of any rent payable by the person entitled to the subordinate interest is less than the commercial amount, capital value is attributable under subsection (1)(b) as if the commercial amount had been paid.
4
If—
a
any rent payable in respect of the subordinate interest is assigned, but
b
no value is given in consideration of the assignment or any value so given is less than the commercial amount,
capital value is attributable under subsection (1)(c) as if the commercial amount had been given on and in consideration of the assignment.
5
If—
a
the subordinate interest is surrendered, or any of the terms on which the subordinate interest was granted are varied or waived, but
b
no value is given in consideration of the surrender, variation or waiver or any value so given is less than the commercial amount,
capital value is attributable under subsection (1)(d) as if the commercial amount had been given on and in consideration of the surrender, variation or waiver.
6
Capital value is not attributable to the subordinate interest if it is paid in consideration of the grant of a lease to which an election under section 290 (treating grant of lease exceeding 50 years as sale) applies.
Pt. 3 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 18 (with Sch. 10 para. 21); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
Pt. 3 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 5 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 3 modified (E.W.S.) (8.6.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 4; S.I. 2005/1444, art. 2(1), Sch. 1
Pt. 3 modified (8.6.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 15; S.I. 2005/1444, art. 2(1), Sch. 1
Pt. 3 modified (24.7.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 24; S.I. 2005/1909, art. 2, Sch.
Pt. 3 restricted (19.7.2007) by Finance Act 2007 (c. 11), s. 36(1)-(3), (7)
Pt. 3 omitted (with effect in relation to chargeable periods beginning on or after 1.4.2011 for corporation tax purposes and 6.4.2011 for income tax purposes in accordance with ss. 84(1)(3)(4), 85, 86 of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 84(2) (with Sch. 27)
Pt. 3 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 21(1)
Pt. 3 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 38(1)