Rents receivable from tied houses should be included in the Case
I computation and not assessed under Schedule A. Rents paid are
admissible deductions.
ICTA88/S98 has regard to rent receivable, and not to rent
received, by the brewer but to rent paid, and not to rent payable,
by the brewer. The distinctions need not normally be regarded as
material provided the treatment is consistent. In certain cases,
however, the precise terms of the Section may be of importance, for
example, in dealing with rents between associated concerns.
Where rent receivable is the basis of computation, any
deduction allowed subsequently for rent waived should not exceed
the untaxed rent previously brought into account in respect of the
period for which the rent is waived. An allowance should not be
made for rent waived if the waiver does not arise wholly out of the
normal trading relationship between brewer and tied tenant - as
might be the case, for example, where the tenant is a subsidiary
company.
See
BIM61410 in connection with the
disallowance of rent attributable to domestic accommodation in the
accounts of publicans.
