The application of the rules charging premiums to income tax or corporation tax as income depend on the 'effective duration' of the lease. In may cases this will be straightforward, but there are rules under which the effective duration will be a period other than the stated term of the lease in certain cases.
Rule 1
If:
- Ìý
(a)ÌýÌýÌýÌý the terms of the lease or other circumstances mean that it is unlikely that the lease will continue beyond a date which is before the end of the term for which the lease was granted, and
- Ìý
(b)ÌýÌýÌýÌý the premium payable was not substantially greater than it would have been had the lease been drafted to expire on that date,
then
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Web page updated on 17 Mar 2025 16:28