Income Tax Act 2007 section 614CD

Application of provisions of Chapter 2 for purposes of this Chapter

Section 614CD explains how certain computational rules from Chapter 2 (dealing with finance leases with a return in capital form) are borrowed and applied for the purposes of Chapter 3 (other finance leases), with a specific cross-reference adjustment.

• The rules in sections 614BG to 614BQ — covering the reduction of taxable rent by cumulative rental excesses, the meaning of accountancy rental excess, and the treatment of lease assignments — all apply to Chapter 3 in the same way as they apply to Chapter 2.
• However, where sections 614BH(1) and 614BK(1)(a) refer to the Chapter 2 charging provision (section 614BF), those references must be read as references to section 614CC, which is the equivalent charging provision in Chapter 3.
• The practical effect is that the same computational machinery is used for both chapters, ensuring consistency in how rental excesses and adjustments are calculated across different types of finance lease.
• This provision is based on paragraph 17 of Schedule 12 to the Finance Act 1997.