BIM61301 - Leasing: avoidance: sale and leaseback of land: ICTA88/S779

ICTA88/S779 places a limit, by reference to commercial rent, on certain IT reliefs (see (c) below) that can be obtained in respect of rents etc paid for land that has been sold and leased back.

The Section operates where:

1. a person (the transferor) transfers, after 14 April 1964, any estate or interest in land, including buildings (see also BIM61310),

and

2. then or thereafter the transferor or any person associated with the transferor, as defined in ICTA88/S779 (11), becomes liable to make any payment, including a premium treated as rent under the property income rules (see PIM1200 onwards), in any way connected with the land,

and

3. that payment is the subject of one of the reliefs mentioned in BIM61210 or of a Schedule A or a property income deduction (see PIM2000 onwards).

In these circumstances the deduction by way of IT relief is not to exceed the commercial rent of the land for the period to which the payment relates (see BIM61305).

ICTA88/S779 does not require that any connection should be shown between events (a) and (b) above.

As regards the treatment of arrangements entered into by medical practitioners with the General Practitioners Finance Corporation under a scheme for the sale and leaseback of surgery premises, see BIM54010, final sub-paragraph.