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HMRC internal manual

Business Leasing Manual

’Income-into-capital’ schemes and back loaded leases: Lease changes: catching-up charge - deemed periods of account

In order to calculate correctly the cumulative accountancy rental excess used to measure the ‘catching up’ charge a period of account is deemed to end immediately before the lease first comes with Chapter 2 of Part 21 of CTA 2010 (CTA10/S923(3)). That ensures that any rental excess arising from the beginning of the actual period of account in which the change of status occurs is properly recognised. The catching-up charge is crystallised at the end of that deemed period of account.