Income Tax Act 2007 section 614BP

Effect of disposals of leases: general

Section 614BP deals with the tax consequences when a lessor, or a person connected with the lessor, disposes of a lease interest, the leased asset, or a representative asset, by deeming one accounting period to end and another to begin immediately before the disposal.

• When a lessor or connected person disposes of the lease interest, the leased asset, or an asset representing the leased asset, an accounting period is treated as ending and a new one beginning immediately before the disposal.
• If two or more such disposals happen at the same time and there is a cumulative accountancy rental excess for the period, they are treated as a single disposal.
• The terms "dispose" and "disposal" take their meaning from the Taxation of Chargeable Gains Act 1992.
• Where a cumulative accountancy rental excess exists for the period in which the disposal occurs, section 37A of TCGA 1992 provides for the disposal consideration to be reduced by that excess when determining whether a chargeable gain has arisen.