Income Tax Act 2007 section 681BI

Lease treated as ending: rentcharge

Section 681BI deals with the treatment of rentcharges secured on property subject to a new lease, ensuring that rentcharges are included in the rent figure used for anti-avoidance calculations under the sale and leaseback rules.

• Where a rentcharge is secured on all or part of the property subject to a new lease, it must be added to the rent for the purposes of the anti-avoidance provisions
• The rentcharge may be payable by the lessee (L) or by a person linked to L
• The combined total of the rentcharge and the actual rent under the lease is treated as the rent payable for the purposes of sections 681BF to 681BH
• This prevents the use of rentcharges to artificially reduce the stated rent and circumvent the rules on rent reductions and lease variations