BLM72010 - ’Income-into-capital’ schemes and back loaded leases: Relief for set-offs against rentals: features of rental excess reliefs

The following features are common to the two types of rental excess reliefs (‘cumulative accountancy rental excess’ and ‘cumulative normal rental excess’):

• the reliefs apply in precisely the same way to leases within both Chapter 2 and Chapter 3 of Part 21 of CTA 2010;
• both apply on a lease by lease basis (but see BLM72105 for the approach in practice to small leases);
• in neither case is any regard paid to the position for periods ending prior 26 November 1996 (when a new period of account is deemed to begin for the purposes of the schedule);
• neither is dependent on a claim - the reliefs are mandatory;
• on the assignment of the lessor’s interest in the leased asset in circumstances treated as no gain/no loss for capital gains purposes, the assignee inherits both types of unused relief (see BLM72130).