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Finance Act 2003
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- UK Public General Acts
- 2003 c. 14
- SCHEDULE 17A
- Increase of rent treated...
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Changes over time for: Cross Heading: Increase of rent treated as grant of new lease: abnormal increase after fifth year
Version Superseded: 01/07/2012
Alternative versions:
- 22/07/2004- Amendment
- 19/07/2006- Amendment
- 07/12/2007
Point in time - 01/07/2012- Amendment
- 17/07/2013- Amendment
Status:
Point in time view as at 07/12/2007.
Changes to legislation:
Finance Act 2003, Cross Heading: Increase of rent treated as grant of new lease: abnormal increase after fifth year is up to date with all changes known to be in force on or before 26 May 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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[F1Increase of rent treated as grant of new lease: abnormal increase after fifth yearU.K.
Textual Amendments
F1Sch. 17A inserted (with effect in accordance with Sch. 39 para. 26 of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 22(2) (which amending provision re-enacts, subject to certain changes, a corresponding amendment made by the now revoked Stamp Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) Regulations 2003 (S.I. 2003/2816), see Sch. 39 para. 14) (with Sch. 39 paras. 11, 13(5))
14(1)This paragraph applies if, after the end of the fifth year of the term of a lease—U.K.
(a)the amount of rent payable increases (or is increased) [F2, whether in accordance with the provisions of the lease or otherwise], and
(b)the rent payable as a result (“the new rent”) is such that the increase falls to be regarded as abnormal (see paragraph 15).
(2)The increase in rent is treated as if it were the grant of a lease in consideration of the excess rent.
(3)The excess rent is the difference between the new rent and the rent previously taxed.
[F3(4)Where the provisions of this paragraph have not previously applied to an increase in the rent payable under the lease, the rent previously taxed is—
(a)if paragraph (b) or (c) does not apply, the rent payable under the lease without the increase referred to in sub-paragraph (1);
(b)if the amount of rent payable under the lease is determined under paragraph 7 (variable or uncertain rent), the rent that is assumed to be payable after the fifth year of the term of the lease (in accordance with paragraph 7(3));
(c)if there has been a variation in the lease falling within paragraph 13 (increase of rent treated as grant of new lease: variation of lease in first five years), the rent payable as a result of the variation (or, if there has been more than one such variation, the most recent one).
(4A)Where the provisions of this paragraph have previously applied to an increase in the rent payable under the lease, the rent previously taxed is the rent payable as a result of the last increase in relation to which the provisions of this paragraph applied.
(4B)In determining the rent previously taxed, disregard paragraphs 9(2) and 9A(3) (deemed reduction of rent, where further lease granted, for period during which rents overlap).]
(5)The deemed grant is treated as—
(a)made on the date on which the increased rent first became payable, and
(b)for a term equal to the unexpired part of the original lease,
and as linked with the grant of the original lease (and with any other transaction with which that transaction is linked).
(6)The assumption in paragraph 7(3) (that the rent does not change after the end of the fifth year of the term of a lease) does not apply for the purposes of this paragraph or paragraph 15 except for the purpose of determining the rent previously taxed.
[F4(7)The reference to a lease in sub-paragraph (1) is to—
(a)a lease actually granted on or after the implementation date, or
(b)a lease that is treated as existing by reason of a deemed grant under paragraph 12A(2) or 19(3) of which the effective date is on or after the implementation date.]]
Textual Amendments
F2Words in Sch. 17A para. 14(1)(a) substituted (with effect in accordance with Sch. 25 para. 9(5)(6) of the amending Act) by Finance Act 2006 (c. 25), Sch. 25 para. 7(1)
F3Sch. 17A para. 14(4)-(4B) substituted for Sch. 17A para. 14(4) (with effect in accordance with Sch. 25 para. 9(5)(6) of the amending Act) by Finance Act 2006 (c. 25), Sch. 25 para. 7(2)
F4Sch. 17A para. 14(7) inserted (with effect in accordance with Sch. 25 para. 9(5)(6) of the amending Act) by Finance Act 2006 (c. 25), Sch. 25 para. 7(3)
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