Part 2Trading income

Chapter 5Trade profits: rules allowing deductions

Tenants under taxed leases

60Tenants under taxed leases: introduction

1

Sections 61 to 67 apply if land used in connection with a trade is subject to a taxed lease.

2

Section 61 (tenants occupying land for purposes of trade treated as incurring expenses) applies in calculating the profits of a trade carried on by the tenant under the taxed lease for the purpose of making deductions for the expenses of the trade.

3

But any deduction for an expense under section 61 is subject to the application of any provision of Chapter 4 of this Part.

4

In this section and sections 61 to 67 the following expressions have the same meaning as in Chapter 4 of Part 3 (profits of property businesses: lease premiums etc.)—

  • receipt period” (see section 288(6)),

  • taxed lease” (see section 287(4)),

  • taxed receipt” (see section 287(4)), and

  • unreduced amount” (see section 290(2)).

5

Section 290(3) and (4) (unreduced amount of taxed receipt under section 277 as a result of section 278) applies for the purposes of sections 61 to 65.

6

In sections 64 to 67 references to a reduction under section 288 F1below or section 228 of CTA 2009 by reference to a taxed receipt have the same meaning as in Chapter 4 of Part 3 (see section 290(6)).

7

In the application of sections 64 to 67 to Scotland—

a

references to a lease being granted out of a taxed lease are to the grant of a sublease of land subject to the taxed lease, and

b

references to the lease so granted are to be read as references to the sublease.