Taxation (International and Other Provisions) Act 2010 Schedule 7 Part 3

Relocation of provisions on lease premium determinations affecting multiple taxpayers

Schedule 7 Part 3 (paragraphs 17–24) relocates and updates the rules governing how HMRC determines amounts treated as taxable receipts under the lease premium provisions, particularly where that determination affects the tax liability of more than one person. These rules were previously in section 42 of the Income and Corporation Taxes Act 1988 and are now inserted as sections 302A, 302B and 302C of the Income Tax (Trading and Other Income) Act 2005.

• Where HMRC needs to determine a lease premium receipt that affects more than one taxpayer's liability to income tax, corporation tax or capital gains tax, the officer may issue a provisional notice of determination to all affected parties, setting out the proposed figure and their rights to object.
• Any person receiving a provisional notice has 30 days to lodge a notice of objection; if nobody objects within that period, the officer's proposed determination becomes final and cannot be challenged in any proceedings.
• HMRC may require any person to provide information needed to decide whether to issue provisional notices, and the provisional notice itself may include the officer's reasoning — even if this would otherwise be restricted by confidentiality obligations.
• If an objection is lodged, the matter is referred to an independent tribunal for determination in the same manner as a tax appeal; all persons who received provisional notices may be a party to the proceedings, and all of them (and their successors in title) are bound by the outcome whether or not they participated.