Corporation Tax Act 2009 section 230

Meaning of "unused amount" and "unreduced amount"

Section 230 defines two key terms — "unused amount" and "unreduced amount" — used when calculating the relief available to tenants who have paid lease premiums or similar sums that have already been taxed on the landlord.

• The "unreduced amount" of a taxed receipt is the amount originally calculated as taxable on the landlord under the lease premium rules (covering premiums, sums paid instead of rent, sums for surrender or variation of a lease, and assignments at undervalue).
• A taxed receipt has an "unused amount" if the unreduced amount exceeds the total reductions and deductions that have already been claimed against it — meaning there is still relief available for the tenant to use.
• Where a lease premium includes an obligation to carry out work that qualifies for capital allowances, the unreduced amount is calculated as if that work obligation did not exist, preventing a double benefit from both capital allowances and the lease premium deduction.
• The reductions and deductions that reduce the unused amount include those claimed under the additional calculation rule for sub-leases, deductions by tenants using the land for a trade, and deductions by tenants using the premises for a property business.