(1)This section applies if—
(a)an estate or interest in land is sold subject to terms which provide that it is to be, or may be required to be, reconveyed on a future date to the seller or a person connected with the seller,
(b)the period beginning with the sale and ending with the earliest date on which under the terms of the sale the estate or interest would fall to be reconveyed is 50 years or less, and
(c)the price at which the estate or interest is sold exceeds the price at which it is to be reconveyed.
(2)The seller is treated as—
(a)entering into a transaction mentioned in section 205 (if the land is in the United Kingdom) or section 206 (if the land is outside the United Kingdom), and
(b)receiving the amount calculated under subsection (4) as a result of that transaction.
(3)That amount is brought into account as a receipt in calculating the profits of the property business which consists of or includes that transaction for the accounting period in which the estate or interest is sold.
(4)The amount of the receipt is given by the formula—
E × 50 - Y50
where—
E is the amount by which the price at which the estate or interest is sold exceeds the price at which it is to be reconveyed, and
Y is the number of complete periods of 12 months (other than the first) comprised in the period beginning with the sale and ending with the earliest date on which under the terms of the sale the estate or interest would fall to be reconveyed.
(5)See section 226 for some provisions which are supplementary to this section.
(1)This section applies if—
(a)an estate or interest in land is sold subject to terms which provide for the grant of a lease directly or indirectly out of the estate or interest to the seller or a person connected with the seller,
(b)the period beginning with the sale and ending with the earliest date on which under the terms of the sale the lease would fall to be granted is 50 years or less, and
(c)the price at which the estate or interest is sold exceeds the total of—
(i)the amount of any premium for the lease, and
(ii)the value on the date of the sale of the right to receive a conveyance of the reversion immediately after the lease begins to run.
(2)This section does not apply if the lease is granted and begins to run within one month after the sale.
(3)The seller is treated as—
(a)entering into a transaction mentioned in section 205 (if the land is in the United Kingdom) or section 206 (if the land is outside the United Kingdom), and
(b)receiving the amount calculated under subsection (5) as a result of that transaction.
(4)That amount is brought into account as a receipt in calculating the profits of the property business which consists of or includes that transaction for the accounting period in which the estate or interest is sold.
(5)The amount of the receipt is given by the formula—
E × 50 - Y50
where—
E is the amount by which the price at which the estate or interest is sold exceeds the total of—
the amount of any premium for the lease, and
the value on the date of the sale of the right to receive a conveyance of the reversion immediately after the lease begins to run, and
Y is the number of complete periods of 12 months (other than the first) comprised in the period beginning with the sale and ending with the earliest date on which under the terms of the sale the lease would fall to be granted.
(6)See section 226 for some provisions which are supplementary to this section.
(1)This section operates for the purposes of sections 224 (sales with right to reconveyance) and 225 (sale and leaseback transactions).
(2)Subsection (3) explains how to determine for the purposes of section 224 the price at which an estate or interest is to be reconveyed when—
(a)the date on which the estate or interest would fall to be reconveyed is not fixed under the terms of the sale, and
(b)the price at which it is to be reconveyed varies with the date.
(3)The price is taken to be the lowest possible under the terms of the sale.
(4)Subsection (5) explains how to determine for the purposes of section 225 the total of—
(a)the amount of any premium for the lease, and
(b)the value on the date of the sale of the right to receive a conveyance of the reversion immediately after the lease begins to run,
when the date for the grant of the lease is not fixed under the terms of the sale and the total varies with the date.
(5)The total is taken to be the lowest possible under the terms of the sale.
(6)For the purposes of sections 224(3) and 225(4) (receipts of property business for accounting period in which estate or interest sold) an estate or interest in land is sold when any of the following occurs—
(a)an unconditional contract for its sale is entered into,
(b)a conditional contract for its sale becomes unconditional, or
(c)an option or right of pre-emption is exercised requiring the seller to enter into an unconditional contract for its sale.