Income Tax (Trading and Other Income) Act 2005 section 283

Provisions supplementary to section 282

Section 283 defines key terms used in section 282, specifically what constitutes a lease granted at an undervalue and how profit on a lease assignment is calculated.

• A lease is granted at an undervalue if the landlord could have demanded an additional premium at the time of grant, and that additional sum is the undervalue
• Whether a lease was granted at an undervalue is tested by reference to values prevailing at the time of grant, assuming arm's length negotiations
• A profit arises on assignment of a lease when the consideration received exceeds either the original premium (if never previously assigned) or the consideration paid on the last assignment
• The amount by which the assignment consideration exceeds the original premium or last assignment consideration is the profit