Corporation Tax Act 2009 section 60A

Rental rebates

Section 60A restricts the tax deduction a lessor can claim when it pays a rental rebate to a lessee on termination of a plant or machinery lease.

• The deductible amount of a rental rebate is capped at the lessor's total taxable income from the lease, and for finance leases the finance charge element is excluded from that income figure
• A rental rebate is any payment to the lessee calculated by reference to the asset's termination value, including sale proceeds, insurance receipts, or estimated market value
• Where the lessor acquired the asset through a qualifying transfer of trade or a connected-persons election, the successor lessor is treated as having been the lessor throughout
• Any rebate amount disallowed as a trading deduction may instead be treated as a capital gains allowable loss, but only against gains on disposal of the same asset