It is in principle possible for there to be a series of
disposals on which relief for cumulative accountancy rental excess
under FA97/Sch12/Para12 (1) may be available.
For example, assume the only asset of a company is the share
capital of its 100% subsidiary which leases, in circumstances
within Schedule 12, a single asset. At different times the leased
asset itself, the shares in the lessor or the shares in its parent
(both assets representing the leased asset) may be sold.
Relief given on the first disposal is prevented from being
available on a subsequent disposal by FA97/Sch12/Para6(4)(c) which
reduces the cumulative accountancy rental excess by the amount
deducted in the capital gains computation on the disposal. The same
provision also prevents cumulative accountancy rental excess
deducted in this way from being set against normal rent arising
subsequently. (This situation could arise on the part disposal of a
leased asset in circumstances where the part retained continues to
generate rental income.)
