Finance Act, 1965
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Certain leases to be deemed to have required payments of premiums. |
57.— Section 86 of the Finance Act, 1963 , is hereby amended by— | |
(i) the insertion after subsection (2) of the following subsections: | ||
“(2A) Where, under the terms subject to which a lease is granted, a sum becomes payable by the lessee in lieu of the whole or a part of the rent for any period, or as consideration for the surrender of the lease, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but— | ||
(a) in computing tax chargeable by virtue of this subsection in respect of a sum payable in lieu of rent, the term of the lease shall be treated as not including any period other than that in relation to which the sum is payable; | ||
(b) notwithstanding anything in subsection (1) of this section, rent treated as arising by virtue of this subsection shall be deemed to become due when the sum in question becomes payable by the lessee. | ||
(2B) Where, as consideration for the variation or waiver of any of the terms of a lease, a sum becomes payable by the lessee otherwise than by way of rent, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but in computing tax chargeable by virtue of this subsection the term of the lease shall be treated as not including any period which precedes the time at which the variation or waiver takes effect or falls after the time at which the variation or waiver ceases to have effect, and notwithstanding anything in subsection (1) of this section rent treated as arising by virtue of this subsection shall be deemed to become due when the contract providing for the variation or waiver is entered into.”; | ||
(ii) the insertion in subsection (3) of “, (2A) or (2B)” before “of this section” and before “shall not apply” and the addition to the said subsection (3) of the following proviso : | ||
“Provided that where the amount relates to a payment falling within the said subsection (2B), it shall not be so treated unless the payment is due to a person connected with the lessor.”; | ||
(iii) the deletion in paragraph (a) of subsection (4) of “of premium” and of “subsection (1) or subsection (3) of” and the substitution in that paragraph of “foregoing provisions of this section” for “said subsection (1) or, as the case may be, the said subsection (3)”; | ||
(iv) the deletion in paragraph (b) of subsection (4) of “subsection (1) or subsection (3) of” and of “of premium”. |