Income Tax (Trading and Other Income) Act 2005 section 286

Provisions supplementary to sections 284 and 285

Section 286 provides supplementary rules for determining prices, totals and timing in connection with sales with a right to reconveyance (section 284) and sale and leaseback transactions (section 285).

• Where the reconveyance date is not fixed and the reconveyance price varies with the date, the price is taken to be the lowest possible under the terms of the sale.
• Where the date for granting a leaseback is not fixed and the combined total of the lease premium and the value of the reversion varies with the date, that total is taken to be the lowest possible under the terms of the sale.
• An estate or interest in land is treated as sold when an unconditional contract is entered into, a conditional contract becomes unconditional, or an option or right of pre-emption is exercised requiring the seller to enter into an unconditional contract.
• These rules ensure that the tax charge under sections 284 and 285 is calculated on a consistent basis even when key dates or amounts are not predetermined.