Part 21

Leasing arrangements: finance leases and loans
Chapter 2

Finance leases with return in capital form

Reduction of taxable rent by cumulative rental excesses

Reduction of taxable rent by cumulative rental excesses: introduction
906
1
This section and sections 907 to 910 provide for reductions of the taxable rent of a current lessor (“L”) under a lease to which this Chapter applies.
2
In this section and sections 907 to 910 “taxable rent”, in relation to a period of account of L, means the amount that would, apart from those sections, be treated for corporation tax purposes as rent from the lease that arises to L in that period of account for the purpose of determining L's liability to tax for the related accounting period or periods.
3
The reductions of taxable rent under sections 907 to 910 depend on there being—
a
a cumulative accountancy rental excess for the period of account of L in question, or
b
a cumulative normal rental excess for the period of account of L in question.
4
For the meaning of “cumulative accountancy rental excess” and “cumulative normal rental excess”, see sections 907 and 909 respectively.