Corporation Tax Act 2010 section 908

Reduction of taxable rent by the cumulative accountancy rental excess

Section 908 allows a lessor to reduce taxable rent on a finance lease where the normal rent exceeds the accountancy rental earnings and a cumulative accountancy rental excess has built up.

• This section applies where, for a period of account, the normal rent on a lease exceeds the accountancy rental earnings and there is a cumulative accountancy rental excess.
• The taxable rent for the period may be reduced by setting the cumulative accountancy rental excess against it, but not below the level of the accountancy rental earnings.
• The effect is that the amount brought into account for corporation tax purposes sits between the normal rent and the accountancy rental earnings, rather than being the full normal rent.
• Section 911 may further limit the amount of cumulative accountancy rental excess that can be set against taxable rent in certain circumstances, such as where bad debt relief applies.