'Normal rent' from a lease is defined in FA97/Sch12/Para20 as
the sums which would be taxable as rent on the lessor under tax law
apart from Schedule 12.
HMRC guidance on what counts as normal rent in the article on
Schedule 12 published in the April 1997 issue of Tax Bulletin. That
was in the context of the condition in paragraph 3(3) (see
BLM70561), part of the definition of a
lease within Part I, but the following extract from the guidance
applies generally for the purposes of Schedule 12.
`So long as they are taxable revenue items on first principles, we would regard termination receipts and other sums representing consideration for the hire of the asset as 'normal rent' within paragraph 20 of Schedule 12.... This is the case whether or not such sums are described as rentals in the relevant documentation. By 'first principles' we mean the basic charging rules of Schedule A [property income] or Schedule D [trading income] as opposed to special rules, such as the Schedule A premium rules.`
