By Kay Keam - 2 Oct 2012
In July this year Inland Revenue released a policy document
setting out changes to the treatment of lease inducement
payments. Those changes were to have effect to inducements
payable on leases entered into on or after 26 July 2012. As a
result of feedback and consultation, Inland Revenue announced
changes to the initial proposal last week.
Briefly those changes include:
- The effective date has been pushed out to 1 April 2013 so
inducements payable on leases entered into on or before 31 March
2013 can remain tax free (if structured correctly).
- Lease inducement payments will be deductible by landlords.
- Income and expenditure arising from these payments will be
spread evenly over the term of the lease.
We have been waiting since July for the specific detail of the
policy. The policy will apply to other leasing transactions
such as surrenders, subleases, licences, assignments and
renewals. It is important to seek tax advice as part of any
leasing transaction. We will keep you updated as more detail
is released.
Links:
Media statement from Hon. Peter Dunne, Minister of
Revenue
Contact:
Mike
Worsnop