Income Tax Act 2007 section 681DF

Adjustments where sum obtained before payment made

Section 681DF deals with the adjustments that must be made when a capital sum is obtained from a leased asset before a lease payment is subsequently made, and sets out the time limit for making those adjustments.

• Where a capital sum is obtained and a lease payment is made afterwards, adjustments must be made to give effect to any income tax charge on the capital sum
• Adjustments are required to ensure the correct income tax charge applies in respect of the capital sum previously obtained
• The deadline for making adjustments is five years after the 31 January following the tax year in which the later payment is made
• This extended time limit overrides any other time limits that may exist elsewhere in the Income Tax Acts