Corporation Tax Act 2009 section 233

Restrictions on section 232 expenses: the additional calculation rule

Section 233 restricts the expense relief available to a tenant under section 232 where the same taxed receipt has already been used to reduce a lease premium receipt under the additional calculation rule.

• Where a taxed receipt has been used to reduce a lease premium receipt under the additional calculation rule (section 228 or its income tax equivalent), the expense that the tenant can claim under section 232 for any qualifying day is restricted.
• The tenant may only claim an expense for a qualifying day if the daily amount of the taxed receipt (its unreduced amount divided by the number of days in its receipt period) exceeds the daily reduction of the lease premium receipt (the amount of the reduction divided by the number of days in the lease premium receipt's receipt period).
• Where an expense is allowed, its amount is limited to the excess of the daily amount of the taxed receipt over the daily reduction of the lease premium receipt — ensuring no double relief arises.
• If a qualifying day falls within the receipt periods of more than one lease premium receipt that has been reduced by reference to the same taxed receipt, the daily reductions of all those lease premium receipts are totalled before comparing with the daily amount of the taxed receipt.