Corporation Tax Act 2010 section 840

Carrying forward parts of payments

Section 840 allows disallowed portions of payments under the sale and leaseback rules to be carried forward and potentially relieved against later payments made under the same arrangement.

• Where section 839 has restricted a deduction to the commercial rent level, any disallowed portion of a payment can be carried forward to the period in which the next payment under the arrangement is made.
• The carry-forward applies where one or more later payments are made by the transferor (or an associated person) under the same lease, rentcharge or other relevant transaction.
• The carried-forward amount is treated, for the purposes of the BLAGAB management expenses calculation in section 76 of Finance Act 2012, as if it were made at the time of and for the period of the next later payment.
• If the carried-forward amount is still not fully relieved in that later period, the remaining balance can be carried forward again repeatedly under the same rules.