Income Tax (Trading and Other Income) Act 2005 section 279

Lease premiums: sums payable instead of rent

Section 279, which treats certain lump sums payable in place of rent as if they were lease premiums subject to the premium tax charge, is disapplied for older leases granted or contracted before specific dates in April 1963.

• Section 279 treats lump sums paid instead of rent as lease premiums, bringing them within the lease premium tax rules
• This treatment does not apply to any lease that was granted before 6 April 1963
• It also does not apply to any lease granted under a contract that was entered into before 4 April 1963
• In practice, this exemption protects landlords with very old leases from having historical arrangements retrospectively caught by the premium rules