Annex 1: Minor changes in the law made by the Act: Change 69: Identifying the profits involved where an amount is to be taken into account as a receipt in calculating the profits of a property business: sections 277, 279, 280, 281, 282, 284 and 285
This change relates to the provisions requiring an amount in respect of a premium or other sum payable in connection with a lease to be taken into account as a receipt in calculating the profits of a property business.
Section 34 of ICTA provides that if a premium is payable under the terms subject to which a lease is granted, the landlord is treated as receiving an amount by way of rent. Section 34(4) of ICTA provides that if, under the terms subject to which a lease is granted, a sum becomes payable by the tenant instead of rent or as consideration for the surrender of the lease, the lease is deemed for the purposes of section 34 of ICTA to have required the payment of a premium to the landlord. Section 34(5) of ICTA makes similar provision in the case of a sum payable by the tenant as consideration for the variation or waiver of any of the terms of the lease.
Section 34(7A) of ICTA provides that an amount treated as rent under section 37 of ICTA “shall be taken into account in computing the profits of the Schedule A business in question for the chargeable period in which it is treated as received”. Section 34(1), (4)(b) and (5)(b) of ICTA specify when the rent is deemed to be received.