Income Tax Act 2007 section 614BD

Provisions supplementing section 614BC

Section 614BD defines key terms used in the finance lease conditions (section 614BC) — namely "the relevant tax year" and "the relevant time" — and sets out how normal rent is to be spread for the purpose of determining whether the conditions for the finance lease rules are met.

• The relevant tax year for a major lump sum is the tax year that corresponds to the lessor's period of account in which the lump sum is payable — or, if more than one tax year corresponds, the latest of them.
• The relevant time is the point at which it must be determined whether the conditions in section 614BC are, or were, satisfied for the purposes of section 614BB(1) or (3).
• Rent that is brought into account for income tax as it falls due is treated as accruing evenly over the period covered by each payment under the lease terms, and as falling due as it so accrues.
• The even-spreading rule for rent does not apply where any payment falls due more than 12 months after the time at which any portion of the rent it covers is treated as having accrued.