Income Tax (Trading and Other Income) Act 2005 section 61

Tenants occupying land for purposes of trade treated as incurring expenses

Section 61 allows a tenant under a taxed lease to claim a deemed revenue expense for each day they occupy the leased land for the purposes of their trade.

• A tenant under a taxed lease is treated as incurring a revenue expense for each qualifying day — a day falling within the receipt period on which all or part of the leased land is occupied for trade purposes
• If the whole land is used for trade, the daily expense is the unreduced taxed receipt divided by the number of days in the receipt period (A / TRP); if only part is used, the result is multiplied by the fraction of land occupied, calculated on a just and reasonable basis (F × A / TRP)
• Where there is more than one taxed receipt, the calculation applies separately to each one, and no expense arises if section 292(4B) or (4C) applies
• The deduction available under this section is subject to a cap where the tenant is entitled to a mineral extraction allowance under section 62