Corporation Tax Act 2009 section 232

Tenants under taxed leases treated as incurring expenses

Section 232 explains how a tenant under a taxed lease is treated as incurring a daily revenue expense, calculated by spreading the unreduced taxed receipt evenly over the receipt period.

• A tenant under a taxed lease is treated as incurring a revenue expense for each day falling within the receipt period of that taxed receipt.
• The daily expense is calculated by dividing the unreduced amount of the taxed receipt by the total number of days in the receipt period.
• No expense arises if the taxed receipt would not have existed but for the application of Rule 1 (the rules for determining the effective duration of a lease) under section 243 of CTA 2009 or section 303 of ITTOIA 2005.
• The expenses calculated under this section are subject to further restrictions under sections 233 and 234 where the additional calculation rule is relevant.