Section 614BM — Income Tax Act 2007: Recovery of bad debts following reduction under section 614BL

Recovery of bad debts following reduction under section 614BL 614BM 1 This section applies if in relation to the lease—

a the cumulative accountancy rental excess for any period of account of the current lessor (“L”) has been reduced under section 614BL(2) or (5) because of a bad debt deduction, b in a subsequent period of account of L, an amount (“the relevant credit”) is recovered or credited in respect of the amount which constituted the bad debt deduction, and c there is a cumulative accountancy rental excess for that subsequent period.

2 The cumulative accountancy rental excess for the subsequent period is increased.

3 If the relevant credit does not exceed the total of the reductions under section 614BL(2) or (5), the increase is by the relevant credit.

4 Otherwise, the increase is limited to that total.

5 In this section “ bad debt deduction ” has the meaning given in section 614BL(6).