Corporation Tax Act 2009 section 42

Tied premises

Section 42 deals with how rental income and expenses from premises occupied by a third party should be treated when the company owning the premises also supplies goods sold or used on those premises — most commonly applying to brewery companies that let premises to tied tenants.

• Where a company has an interest in premises occupied by another person and supplies goods sold or used on those premises as part of its trade, the rental income and property expenses are treated as part of the trading profits rather than as a separate property business.
• The premises must be treated as property employed for the purposes of the company's trade for this rule to apply.
• Without this rule, the rental income and associated expenses would normally fall within the company's property business and be taxed separately.
• Where receipts or expenses do not relate solely to the qualifying premises, or only part of the premises meets the conditions, a just and reasonable apportionment must be made.