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HMRC internal manual

Business Leasing Manual

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HM Revenue & Customs
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’Income-into-capital’ schemes and back loaded leases: Relief for set-offs against rentals: cumulative accountancy rental excess: for a period of account

One point of statutory construction to note is that the cumulative accountancy rental excess ‘for’ a period of account is the excess brought forward at the beginning of that period. It does not include any excess arising in the period itself (see CTA10/S907(5)).

TCGA92/S37A(3) gives relief in respect of the cumulative accountancy rental excess ‘for’ the period of account in which the disposal occurs. Without special provision therefore any accountancy rental excess arising in the (actual) period of account in which the disposal takes place could not be set off in the capital gains computation in the disposal. CTA10/S915 avoids this effect by deeming a period of account to end and a new one to begin immediately before the disposal for the purpose of giving the relief under TCGA92/S37A.