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Deductions by way of tax relief for rent payable under sale and lease back arrangements are restricted to the commercial rent, see B5.247¹. The provisions² explained below apply to certain sales or surrenders of leaseholds (but not freeholds) under lease back arrangements, whether or not the rent under the new lease exceeds the commercial rent. Although the lump sum received is stated to be consideration for assigning the lease and the lease back is at an increased rent, in reality the lump sum is a loan and the additional rent represents the repayment of principal and interest. Where the provision applies, a proportion of the consideration is treated as taxable income of the recipient and not as a capital receipt³, but there is no restriction on the amount of the deduction for rent payable under the new lease⁴. For these purposes a lease includes an agreement for a lease and any tenancy, but does not include a mortgage. A reference to a lessee or