Corporation Tax Act 2010 section 269ZYZA

Other relevant credits

Section 269ZYZA defines two additional types of credit that can qualify for an increase in the deductions allowance in the context of onerous leases: "relevant remeasurement credits" arising when lease liabilities are remeasured downwards, and "relevant variable lease payments" arising from coronavirus-related lease concessions.

• A relevant remeasurement credit arises where a tenant's lease liability is reduced (through an arm's length variation or cancellation) by more than the carrying amount of the related right-of-use asset, and the tenant had previously recognised an impairment loss on that asset.
• A relevant variable lease payment arises where, instead of remeasuring the lease liability, the tenant elects to account for a coronavirus-driven rent concession (affecting payments due on or before 30 June 2022) as a variable lease payment, and the tenant had previously recognised an impairment loss on the right-of-use asset.
• In both cases, the arrangement must be at arm's length and additional requirements from section 269ZY concerning the relationship between tenant, landlord and the arrangement must be satisfied.
• The Treasury has the power to extend the 30 June 2022 deadline for coronavirus-related variable lease payment concessions by regulations.