BIM61240 - Leasing: avoidance: assets other than land: special cases: ICTA88/S782

ICTA88/S782 and not ICTA88/S781, applies where a person, carrying on a trade (including a profession or vocation) pays rent under a lease of an asset other than land or buildings (as to which see BIM61300 onwards) and at any time before the lease was created the asset was used either:

• in that trade,

or

• in another trade carried on by the person who then or later was carrying on the first trade,

and when so used was owned by the person carrying on the trade in which it was used.

ICTA88/S782 provides that in computing the profits and gains of the trade the deduction in respect of a payment of rent shall not exceed the commercial rent of the asset for the period for which the payment was made (see BIM61245).

Section 782 does not apply to leases created on or before 14 April 1964.

Asset and lease have the same meanings as under ICTA88/S781 (see BIM61215).