Corporation Tax Act 2010 section 906

Reduction of taxable rent by cumulative rental excesses: introduction

Section 906 introduces the framework for reducing the taxable rent of a current lessor under a finance lease where the return is in capital form.

• Sections 907 to 910 provide mechanisms for reducing the taxable rent of a current lessor ("L") under qualifying finance leases covered by this chapter.
• "Taxable rent" means the amount that would otherwise be treated as rent from the lease arising to L in a period of account for corporation tax purposes, before any reductions under these sections are applied.
• Reductions depend on there being either a "cumulative accountancy rental excess" or a "cumulative normal rental excess" for the relevant period of account of L.
• The definitions of "cumulative accountancy rental excess" and "cumulative normal rental excess" are set out in sections 907 and 909 respectively.