Taxes Consolidation Act 1997 section 105

Taxation of rents: restriction in respect of certain rent and interest

Section 105 prevents a landlord from claiming a deduction for rent or loan interest that relates to a period before the premises were first occupied by a tenant.

• Applies to rent payable in respect of premises and interest on money borrowed to purchase, improve or repair premises.
• The restriction applies only where the rent or interest relates to a period before the premises are first occupied by a tenant (lessee) for the purposes of a trade, undertaking or use as a residence.
• The landlord must be chargeable to tax under Case V of Schedule D (rental income) on the profits or gains from those premises.
• No deduction is allowed under section 97(2) for any year of assessment in respect of such pre-letting rent or interest payments.