Corporation Tax Act 2009 section 136

Lease premiums etc.: reduction of receipts

Section 136 prevents a company that trades in land from being taxed twice on the same lease premium or similar receipt — once as a trading receipt and again as a property business receipt.

• Where a company dealing in land receives a lease premium or similar sum that also counts as a property business receipt, the trading receipt is reduced by the amount already taxed as a property business receipt
• The types of receipt covered include lease premiums, sums paid instead of rent, sums for surrendering or varying a lease, assignments of undervalue leases, and sales with reconveyance rights or sale-and-leaseback arrangements
• If the company later claims a tax repayment in respect of a sale with reconveyance or a sale-and-leaseback transaction, the reduction is recalculated based on the revised property business receipt figure used to determine that repayment
• Any resulting tax adjustment can be made by assessment or otherwise, and may be made at any time within the time limit that would apply if it related solely to tax for the accounting period in which the repayment claim was made