Chapter IHTM44010
| Published date | 20 March 2016 |
| Record Number | IHTM44010 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
For any taxable period, the chargeable amount in relation to the relevant land is the appropriate rental value, less the amount of any payments which the chargeable person makes in the period which they are legally obliged to make to the owner of the relevant land in respect of their occupation, FA04/Sch15/Para 4(1).
The appropriate rental value is defined in FA04/Sch15/Para 4(2) as R × (DV ÷ V) where
- R is the rental value of the relevant land for the taxable period, and
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DV is
- where the chargeable person owned an interest in the relevant land (IHTM44004), the value as at the valuation date of the interest in the relevant land that was disposed of by the chargeable person (IHTM44012), or where the disposal was a non-exempt sale (IHTM44015), the ‘appropriate portion’ of that value, FA04/Sch15/Para 4(2)(a),
- where the chargeable person owned an interest in other property, the proceeds of which were used to acquire an interest in relevant land, (IHTM44004) such part of the value of the relevant land at the valuation date as can reasonably be attributed to the property originally disposed of by the chargeable person (IHTM44013) or, where the original disposal was a non-exempt sale (IHTM44015), to the appropriate portion of that property, FA04/Sch15/Para 4(2)(b), or
- if the contribution condition applies, such part of the value of the relevant land at the valuation date as can reasonably be attributed to the consideration provided by the chargeable person (IHTM44014), FA04/Sch15/Para 4(2)(c). Note that the rules about non-exempt sales do not apply where the contribution condition is met.
- V is the value of the relevant land at the valuation date.
These provisions contain a number of terms that are either defined in the legislation or require explanation
- the ‘taxable period’ means the year of assessment, or part of a year of assessment, during which the POA charge on land applies to the chargeable person, FA04/Sch15/Para 4(6). If the land is only occupied for part of the year, say 6 months, and the chargeable person has no right to occupy the land for the remainder of the year, only one half of the rental value is subject to tax,
- the ‘valuation date’ in relation to a taxable period is 6 April in the relevant year of assessment, or if...
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