Section 269ZYZA Other relevant creditsF1F2
For the purposes of section 269ZX a “relevant remeasurement credit” is a credit, or other income, brought into account in respect of a relevant remeasurement excess.
There is a “relevant remeasurement excess” where—
a company (“C”) is the tenant under a lease of land (and “L” is the landlord),
C’s accounts include a relevant right-of-use asset impairment loss in connection with the lease,
under an arrangement (“C’s arrangement”) made at arm’s length, C’s obligations under the lease are varied or cancelled,
as a result of C’s arrangement, C is required, for accounting purposes, to remeasure the lease liability in relation to the lease,
the remeasurement results in the lease liability being reduced by an amount which exceeds the amount of the right-of-use asset recognised in relation to the lease (taking account of any right-of-use asset impairment loss), and
the relevant requirements are met (see subsection (5)).
For the purposes of section 269ZX a variable lease payment is “relevant” if it is a credit, or other income, brought into account in circumstances described in subsection (4).
Those circumstances are where—
a company (“C”) is the tenant under a lease of land (and “L” is the landlord),
C’s accounts include a relevant right-of-use asset impairment loss in connection with the lease,
under an arrangement (“C’s arrangement”) made at arm’s length, there is a change in the payments that would have been payable by C under the lease on or before 30 June 2022,
the change would not have been made if it were not for coronavirus,
for accounting purposes, C opts to record the change by means of variable lease payments (rather than by remeasuring its lease liability in relation to the lease), and
the relevant requirements are met (see subsection (5)).
For the purposes of subsections (2) and (4), the relevant requirements are met if—
the requirements in section 269ZY(3)(b) and (c), or
the requirements in section 269ZY(3)(c) and (5)(a), (b), (d) and (e),
are met in relation to C, L and C’s arrangement (as defined in subsection (2) or (4), as appropriate).
The Treasury may by regulations substitute for the date for the time being specified in subsection (4)(c) such later date as they consider appropriate.
In this section—
“coronavirus” means severe acute respiratory syndrome coronavirus 2;
“lease liability”, in relation to a company and a lease, means a liability recognised in the company’s accounts to reflect the company’s obligations as tenant under the lease;
“right-of-use asset”, in relation to a company and a lease, means an asset recognised in the company’s accounts to reflect the company’s right to use land as the tenant under the lease;
“relevant right-of-use impairment loss” has the meaning given in section 269ZY(2A).
Annotations
Textual amendments
- F1
Pt. 7ZA inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 16
- F2
S. 269ZYZA inserted (with effect in accordance with s. 30(17)-(19) of the amending Act) by Finance Act 2022 (c. 3), s. 30(14)
Notes on Part 7ZA
Modifications
- C1
Pt. 7ZA modified (retrospective to 29.10.2018) by Finance Act 2020 (c. 14), Sch. 4 para. 46
- C2
Pt. 7ZA modified by 1992 c. 12, Sch. 7A para. 6(1C) (as inserted (with effect in relation to accounting periods beginning on or after 1.4.2020) by Finance Act 2020 (c. 14), Sch. 4 paras. 18(4), 42 (with Sch. 4 paras. 43-46))
- C3
Pt. 7ZA applied (with modifications) (with effect in accordance with Sch. 4 para. 43(1) of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 para. 44(4)
- C4
Pt. 7ZA applied (with modifications) (with application in accordance with Sch. 4 para. 45(1)(2) of the amending Act) by Finance Act 2020 (c. 14), Sch. 4 para. 45(4)
- C5
Pt. 7ZA disapplied (24.2.2022) by Finance Act 2022 (c. 3), Sch. 2 para. 21