Taxes Consolidation Act 1997 section 647

Postponement of payment of corporation tax to be permitted in certain cases

Section 647 allows a company involved in a sale and leaseback transaction to postpone payment of a portion of its corporation tax liability, spreading it over nine annual instalments.

• Where a land dealing company disposes of its full interest in land and leases it back, 90 per cent of the additional corporation tax arising from the deemed consideration under section 646 may be deferred.
• The deferred tax is payable in nine equal annual instalments, the first falling due 12 months after the date on which the tax would otherwise have been payable.
• The deferral is available only while the company retains the leaseback interest and has not disposed of any interest derived from it.
• If the company parts with the leaseback interest, disposes of a derived interest, or commences winding up, the full outstanding balance of deferred tax becomes due and payable immediately.