Income Tax (Trading and Other Income) Act 2005 section 281A

Sums to which sections 277 to 281 do not apply

Section 281A disapplies the lease premium rules in sections 277 to 281 where the grant of a lease forms part of a finance arrangement.

• Where a lease grant is treated as a disposal of an asset under a Type 1 or Type 2 finance arrangement (as defined in ITA 2007), this section applies
• The normal lease premium charging rules in sections 277 to 281 of ITTOIA 2005 are switched off for any premium paid on such a lease grant
• This prevents a double charge by ensuring the premium is dealt with under the finance arrangement rules in ITA 2007 rather than the property income lease premium rules
• The section was introduced as part of the rewrite of the earlier anti-avoidance provisions (formerly sections 774A to 774G of ICTA) into ITA 2007