Corporation Tax Act 2010 section 903

Provisions supplementing section 902

Section 903 defines key terms used in the conditions for finance leases with a return in capital form, and sets out how normal rent is calculated for the purpose of testing whether condition D in section 902 is met.

• The "relevant accounting period" for a major lump sum is the lessor's accounting period that relates to the period of account in which the lump sum is or may be payable — or, if there are two or more such periods, the latest of them.
• The "relevant time" is the point at which it must be determined whether the conditions in section 902 are or were satisfied, as required by section 901(1) or (3).
• When calculating normal rent to test condition D, rent that is brought into account for corporation tax as it falls due is treated as accruing evenly over the period each payment covers under the lease terms, and as falling due as it so accrues.
• This even-accrual treatment does not apply if any lease payment falls due more than 12 months after any of the rent to which that payment relates would be treated as accruing under the even-accrual rule.

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