Corporation Tax Act 2010 section 910

Reduction of taxable rent by the cumulative normal rental excess

Section 910 provides a mechanism to reduce the taxable rent on a finance lease where the accountancy rental earnings exceed the normal rent and there is a cumulative normal rental excess available.

• This section applies where the taxable rent for a period equals the accountancy rental earnings (under section 905) and a cumulative normal rental excess exists.
• The taxable rent is reduced by setting the cumulative normal rental excess against it, but cannot be reduced below the normal rent for the period.
• The purpose is to prevent more rent being taxed as income than is actually due to the lessor when past overpayments have built up.
• Section 913(3) and (4) may further limit the amount of cumulative normal rental excess that can be set against the taxable rent in certain circumstances, such as where bad debt relief applies.