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In certain cases, the amount taxable as income in respect of a premium is reduced. This is referred to in the legislation as the 'additional calculation rule'. It ensures that a property is not doubly taxed under the basic rule at B6.301C. The most common situation in which the rule will apply is where a short-term sublease is granted out of an exiting short-term lease. In such a case, both the landlord under the original lease and the landlord under the sublease will be treated as receiving income under the basic rule, but part or all of the premium under the sublease will represent value already taxed in the hands of the landlord under the original lease. The additional calculation rule is therefore needed to prevent that part from being taxed twice.

The additional calculation rule must be applied to reduce the taxable amount in respect of a premium received on a short-term lease where that lease is granted out of a lease that was itself subject to the lease premium rules (a 'taxed lease')¹.