Sale and leaseback anti-avoidance for companies

Produced by Tolley in association with of Crane Dale Tax

Corporation Tax

Guidance

A sale and leaseback situation arises where land or an interest in land is sold on the basis that the purchaser must grant a lease back to the vendor, or a person connected with the vendor.

This guidance note deals with the following anti-avoidance rules which may impact on sale and leaseback arrangements:

•
rules limiting the amount of corporation tax deduction available for rental payments following a sale and leaseback (CTA 2010, ss 834-886) and
•
rules which treat a portion of the sale price as income rather than capital in certain specified circumstances (CTA 2009, s 225)

The equivalent anti-avoidance rules for income tax are in ITA 2007, ss 681A-681AN.

For HMRC guidance on this topic see BIM61301 onwards, and for the capital gains consequences see CG70774.

For other tax implications of sale and leaseback arrangements relevant to companies, please see the following:

•
the Stamp duty land tax and leases guidance note, specifically the section dealing with SDLT leaseback relief
•
the Capital allowances

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

Popular Articles

Trusts and Inheritance Tax

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Owner-Managed Businesses

Class 4 national insurance contributions

Class 4 national insurance contributionsWhat is Class 4 NIC?Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2

14 Jul 2020 11:13 | Produced by Tolley Read more

Spring Budget 2024

Value Added Tax

Supplies of goods and services connected with education

Supplies of goods and services connected with educationThis guidance note provides an overview of the VAT treatment of goods and services provided in connection with supplies of education. This should be read in conjunction with the following guidance notes:•Supplies of education•Local authority

14 Jul 2020 13:44 | Produced by Tolley Read more

��Ӱ��