Corporation Tax Act 2009 section 226

Provisions supplementary to sections 224 and 225

Section 226 provides supplementary rules for determining prices and timing in connection with sales with a right to reconveyance (section 224) and sale and leaseback transactions (section 225).

• Where the reconveyance date is not fixed and the price varies with the date, the reconveyance price is taken to be the lowest possible under the sale terms
• Where the lease grant date is not fixed and the combined total of any lease premium and the value of the reversion varies with the date, that total is also taken to be the lowest possible under the sale terms
• A property interest is treated as sold when an unconditional contract is entered into, a conditional contract becomes unconditional, or an option or right of pre-emption is exercised requiring an unconditional contract
• These rules ensure consistent treatment of the accounting period in which the property business receipt arises under sections 224 and 225