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HMRC internal manual

Property Income Manual

Deductions: sale and leaseback of land

ITA07/S681A-N and CTA10/S834-848

This legislation counters certain avoidance devices based on arrangements for the sale and leaseback of land or any interest in land.

There are two anti-avoidance rules which:

  • limit the deduction for payments under the lease to a commercial rent, and

  • deal with the situation where a lessee incurs additional rental liability for a comparatively short period in return for the payment of a lump sum.

This is the anti-avoidance legislation that used to be at ICTA88/S779.

For detailed instructions see BIM61300 onwards.