PIM2340 - Deductions: sale and leaseback of land

Sections 681A-681AN Income Tax Act 2007 and sections 834-848 Corporation Tax Act 2010

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 section 779 of the Income and Corporation Taxes Act 1988.

For detailed instructions see BIM61300 onwards.