For rent paid before 1 May 1995, in respect of any land or
easement within the meaning of ICTA88/S119, there was a requirement
to deduct income tax. A Schedule D Case I deduction is denied in
computing the profits of the lessee or licensee by ICTA88/S74
For payments made on or after 1 May 1995, FA95/S145 removed the requirement to deduct income tax from rents within ICTA88/S119. Such rents are an allowable deduction unless the payment is an annual payment. In the latter case a deduction is denied by ICTA88/S74 (1)(m).
Where a lessee claims that rents etc assessed under ICTA88/S349 are wholly or partly paid out of taxed income of previous years, IM3947 should be applied.