Short leases: assignment of short lease granted at under value
ITTOIA 2005/S282 and CTA 2009/S222
ITTOIA 2005/S282 is an anti-avoidance provision which imposes a charge to Income Tax on an unincorporated UK property business in certain circumstances when a short lease is assigned, having been granted for less than its market value. CTA 2009/S222 is an equivalent provision relating to incorporated UK property businesses. (See PIM1202 to PIM1209).
Although TCGA92/S37 generally excludes from the computation for CGT purposes any amounts which have been charged to Income Tax, this does not apply to any amounts charged under ITTOIA 2005/S282 or CTA 2009/S222. TCGA92/SCH8/PARA6 (2) specifically disapplies Section 37 in these circumstances. Hence the full amount of the consideration will be taken into account for CGT purposes.