Part 3U.K.Trading income

Chapter 5U.K.Trade profits: rules allowing deductions

Tenants under taxed leasesU.K.

67Restrictions on section 63 expenses: lease of part of premisesU.K.

(1)This section applies if—

(a)section 66 applies, and

(b)the lease granted out of the taxed lease does not extend to the whole of the premises subject to the taxed lease.

(2)Subsections (3) to (5) apply for a qualifying day that falls within the receipt period of the lease premium receipt.

(3)Sections 63, 65 and 66 apply separately in relation to the part of the premises subject to the lease and to the remainder of the premises.

(4)If—

(a)more than one lease that does not extend to the whole of the premises subject to the taxed lease has been granted out of the taxed lease, and

(b)the qualifying day falls within the receipt period of two or more lease premium receipts that relate to different leases,

sections 63, 65 and 66 apply separately in relation to each part of the premises subject to a lease to which such a lease premium receipt relates and to the remainder of the premises.

(5)Where sections 63, 65 and 66 apply in relation to a part of the premises, A becomes the amount calculated by multiplying the unreduced amount of the taxed receipt by the fraction of the premises constituted by the part.

(6)This fraction is calculated on a just and reasonable basis.