Section 105A — Income Tax (Earnings and Pensions) Act 2003: Lease premiums

Lease premiums 105A 1 For the purposes of section 105(4B)(b) an amount is attributed to the relevant period “in respect of a lease premium” if—

a the property consists of premises, or a part of premises, that are subject to a lease, b the premises are not mainly used by P for a purpose other than the provision of living accommodation to which this Chapter applies, c the lease is for a term of 10 years or less, and d the net amount payable by P in relation to the lease by way of lease premium is greater than zero.

2 The amount so attributed is— A C × C where— A is the relevant period (in days), B is the term of the lease (in days), and C is the net amount payable by P in relation to the lease by way of lease premium.

3 For provision about the application of this section in relation to certain leases with break clauses, see section 105B.

4 For the purposes of this section the net amount payable by P in relation to a lease by way of lease premium is—

a the total amount (if any) that has been paid, or is or will become payable, by P in relation to the lease by way of lease premium, less b any amount within paragraph (a) that has been repaid or is or will become repayable.

5 In this section and section 105B “ lease premium ” means any premium payable—

a under a lease, or b otherwise under the terms on which a lease is granted.

6 In the application of this section to Scotland “ premium ” includes a grassum.