Income Tax (Trading and Other Income) Act 2005 section 60

Tenants under taxed leases: introduction

Section 60 introduces the rules that allow a trading tenant to claim a tax deduction where the land they use is held under a lease on which the landlord has been taxed on a premium or similar amount.

• Where land used in a trade is held under a "taxed lease" (one where the landlord has been taxed on a premium), the tenant is treated as incurring deductible expenses, spread over the life of the lease
• Any deduction the tenant claims under these rules remains subject to the general restrictions on allowable deductions for trading expenses
• Key terms such as "receipt period", "taxed lease", "taxed receipt" and "unreduced amount" take the same meanings as the lease premium rules for property businesses
• In Scotland, references to a lease granted out of a taxed lease are read as the grant of a sublease, and references to that lease are read as the sublease