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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: Lease changes: catching-up charge - 'existing' lease first comes within Chapter 2 of Part 21 of CTA 2010

A ‘catching up’ charge may be necessary when a ‘pre-26 November 1996’ lease first comes within Chapter 2 of Part 21 of CTA 2010 after 26 November 1996. CTA10/S923 deals with an ‘pre-26 November 1996’ lease which is not a Chapter 2 lease, when the test is initially applied as at 26 November 1996, but which later satisfies the conditions in CTA10/S902 and so becomes a Chapter 2 lease. CTA10/S923 imposes a ‘catching up’ charge at the point the conditions are first satisfied. Thereafter the other rules in Chapter 2 apply in the usual way.