ÀÏ˾»úÎçÒ¹¸£Àû

B5.247 Sale and leaseback of land—payments connected with transferred land

The provisions of CTA 2010, ss 834–848 (Pt 19, Ch 1) and ITA 2007, ss 681A–681AN (Pt 12A, Ch 1), are designed to counter tax-avoidance devices where land owned by a trader is transferred and leased back to them for use in their trade. They are comparable with CTA 2010, ss 863–886 (Pt 19, Ch 3 and 4) and ITA 2007, ss 681C–681DP (Pt 12A, Chs 3 and 4), which are designed to achieve the same object in relation to machinery and plant, see B5.410–B5.414. For HMRC guidance on this topic see BIM61301 onwards, and for capital gains consequences see CG70774.

The common method of transaction is where a trader grants a long lease (ie over 50 years) of their land (including business premises) to a property-dealing company at a nominal rent in consideration of a large premium although the legislation is not confined to long leases. The company then grants a lease back to the trader at an excessive rent for the early years