Corporation Tax Act 2010 section 836

Transferor or associate becomes liable for payment other than rent

Section 836 sets out the conditions under which the sale and leaseback rules in Chapter 1 of Part 19 apply where, following a transfer of land, the transferor or an associated company becomes liable to make a payment connected with the land that is not rent under a lease.

• Where land or an interest in land is transferred and the transferor (or an associated company) becomes liable for a non-rent payment connected with that land, sections 838 or 839 may limit the corporation tax deduction available for that payment.
• Section 838 applies where the payment qualifies for a deduction as a relevant corporation tax relief; section 839 applies where the payment is taken into account in calculating management expenses of insurance companies under section 76 of Finance Act 2012.
• The concept of a "transfer" is broadly defined and includes the granting of a lease, the surrender or forfeiture of a lease, and any transaction or series of transactions that results in a change among the owners of the land.
• The rules only apply to transfers made after 14 April 1964, and the liability for the payment must arise from a transaction affecting the land at the time of transfer or later.