Section 845 — Corporation Tax Act 2010: Commercial rent: comparison with payments other than rent

Commercial rent: comparison with payments other than rent 845 1 Subsection (2) applies—

a for the purpose of making a comparison under rule 4 of section 838(3) if section 838 has effect because of section 836(1),

and b for the purpose of making a comparison under section 839(3) if section 839 has effect because of section 836(2).

2 The commercial rent is the rent which might be expected to be paid under a lease, of the land in respect of which the payment mentioned in section 836(1)(b) or (2)(b) is made, which—

a was negotiated in the open market when the rentcharge or other transaction mentioned in section 836(1)(b) or (2)(b) was effected, b is a tenant's repairing lease, and c is of an appropriate duration.

3 A tenant's repairing lease is a lease where the lessee is under an obligation to maintain and repair the whole (or substantially the whole) of the premises comprised in the lease.

4 To see whether a lease is of an appropriate duration, take the period over which payments are to be made under the rentcharge or other transaction, and—

a if that period is 200 years or more (or the obligation to make the payments is perpetual) an appropriate duration is 200 years, or b if that period is less than 200 years, an appropriate duration is the same duration as that period.