Taxes Consolidation Act 1997 section 102

Deduction by reference to premium, etc paid in computation of profits for purposes of Schedule D, Cases I and II

Section 102 allows a business tenant who has paid a premium (or deemed premium) on a lease to claim a tax deduction for that premium, spread over the relevant period, as if it were additional rent paid for the premises.

• Where a landlord has been charged to tax on a premium under sections 98, 99 or 100, the tenant who occupies the premises for business purposes may treat a corresponding amount as additional rent for tax purposes, deductible in computing trading profits.
• The deduction is spread over the "relevant period," which depends on how the charge arose: the full lease term (section 98), the remaining lease term from assignment (section 99), or the period from sale to reconveyance or leaseback (section 100).
• Where part of the premium relates to work on the premises that qualifies for capital allowances, that part is excluded from the deduction to prevent a double tax benefit.
• If a sale-and-leaseback arrangement results in a different reconveyance price or date than originally assumed, the deduction is recalculated retrospectively and tax assessments are adjusted accordingly.