Corporation Tax Act 2010 section 916

Assignments on which neither a gain nor a loss accrues

Section 916 deals with what happens to cumulative rental excesses when a lessor assigns their interest in a lease in circumstances where, for chargeable gains purposes, neither a gain nor a loss arises on the disposal.

• When a lessor assigns their lease interest in a no gain/no loss transaction, the lessor's accounting period is treated as ending and the assignee's accounting period as beginning at the point of assignment.
• Any cumulative accountancy rental excess that the original lessor had built up transfers automatically to the assignee and becomes their cumulative accountancy rental excess going forward.
• Likewise, any cumulative normal rental excess accumulated by the original lessor passes to the assignee on the same basis.
• Where the assignee is subject to income tax rather than corporation tax, the section applies for the purposes of the equivalent income tax provisions in Part 11A of ITA 2007.