Income Tax Act 2007 section 614BU

Capital allowances deductions: waste disposal and cemeteries

Section 614BU addresses what happens when a lessor who has previously claimed capital expenditure deductions for waste disposal sites or cemeteries and crematoria receives a major lump sum payment in connection with the leased asset.

• Applies where the current lessor has received capital expenditure deductions for preparing or restoring a waste disposal site, or for capital expenditure on cemeteries and crematoria
• When a relevant occasion arises (such as the assignment or surrender of the lease), the lessor is treated as having received trading receipts
• The amount treated as a trading receipt is the lower of the major lump sum received and the total deductions previously allowed
• The effect is to claw back earlier tax relief by bringing an appropriate amount back into charge as taxable trading income