Commentary on Sections Overview Overview Section 234: Restrictions on section 232 expenses: lease of part of premises
861.This section adapts sections 232 and 233 for cases where the lease premium receipt arises in relation to only a part of the premises in respect of which the taxed receipt arose. It is based on sections 37(6) and 37A of ICTA. The corresponding provision for income tax is in section 294 of ITTOIA.
862.Section 227 extends relief under section 228 to business property receipts treated as arising in relation to the variation or waiver of the terms of a lease. This is reflected in the reference in subsection (2) to section 221. See Change 46 in Annex 1.
863.Subsection (4) applies sections 232 and 233 separately to that part of the premises in relation to which the lease premium receipt arises and to the remainder of the premises. And subsection (5) deals with the case where there is more than one sublease which does not extend to the whole of the landlord’s premises. See Change 13 in Annex 1.
864.Subsection (6) adapts sections 232 and 233 by multiplying the unreduced amount of the taxed receipt (“A”) by the fraction of the premises to which the lease premium relates in the formulas for calculating:
	the expense for a qualifying day in section 232(4); and
	the daily amount of the taxed receipt in section 233(6).
865.Subsection (7) requires the fraction in subsection (6) to be calculated on a “just and reasonable basis”, where section 37(6) of ICTA is not explicit about the necessary basis of apportionment. See Change 12 in Annex 1.