BLM74355 - Schedule 12 FA 1997: lease changes: calculation of catching-up charge

The catching-up charge under FA97/Sch12/Para13 is imposed on the 'cumulative accountancy rental excess' (see BLM73010) which would have been in existence immediately prior to the time when the lease first comes within Part I if Part I had applied to the lease for all periods beginning with 26 November 1996. This is the income which may be turned into capital.

The cumulative accountancy rental excess is the difference between:

• the rental income recognised in the accounts from 26 November 1996 to the time the lease first comes within Part I Schedule 12, and
• the income actually recognised for tax over that period.