Capital Allowances Act 2001 section 390

Interpretation of section 389

Section 390 defines the key terms used in section 389, which restricts balancing allowances where agricultural buildings are sold subject to a subordinate interest such as a lease or similar right over the land.

• "Commercial rent" is the arm's length rent that would reasonably be expected for a subordinate interest, taking account of any premium paid for the grant of that interest.
• "Premium" covers any capital consideration received, but excludes amounts already taxed as property business receipts under the lease premium rules in the Corporation Tax Act 2009 or the Income Tax (Trading and Other Income) Act 2005.
• "Subordinate interest" means any interest in or right over the related agricultural land, regardless of whether it was granted by the former owner or by someone else.
• "Capital consideration" is consideration in the form of a capital sum (or that would be capital if paid in money), and "rent" is defined broadly to include any consideration that is not capital consideration.