Income Tax (Trading and Other Income) Act 2005 section 65

Restrictions on section 61 expenses: lease of part of premises

Section 65 deals with how the tenant's expense deduction rules are adjusted when a sublease is granted over only part of the premises held under the original taxed lease, rather than the whole.

• This section applies where section 64 restrictions are in play and the sublease covers only part of the premises subject to the taxed lease, not the whole.
• The expense deduction rules in sections 61, 63, and 64 are applied separately to the sub-let portion of the premises and to the remainder, for any qualifying day falling within the receipt period of the lease premium receipt.
• Where multiple subleases of different parts of the premises exist and their receipt periods overlap on the same qualifying day, the rules apply separately to each sub-let part and to whatever portion of the premises is not sub-let.
• The amount "A" used in the expense calculations is adjusted by multiplying the unreduced amount of the taxed receipt by the fraction of the premises that the relevant part represents, with that fraction determined on a just and reasonable basis.