Income Tax Act 2007 section 614BI

Reduction of taxable rent by the cumulative accountancy rental excess

Section 614BI explains how a lessor's taxable rent for a period of account can be reduced where the normal rent exceeds the accountancy rental earnings and a cumulative accountancy rental excess has built up.

• This section applies when, for a period of account, the normal rent under the lease exceeds the accountancy rental earnings and there is a cumulative accountancy rental excess
• The taxable rent for the period is reduced by setting the cumulative accountancy rental excess against it, but the rent cannot be reduced below the amount of the accountancy rental earnings
• In effect, the lessor is taxed on no less than the accountancy rental earnings, even after the reduction
• Section 614BL may further limit the amount of cumulative accountancy rental excess that can be set against the taxable rent, for example where there has been relief for bad debts