Once again, in broad terms the object of the legislation is to restrict the amount of the deduction for the relevant payment made by the transferor (or associated person), to the ‘commercial rent’. The mechanism in this case is simpler than that restricting the amount of income tax relief.

It is the ‘non-excluded element of the payment’ for which the transferor (or associated person) is liable under ITA 2007, s. 681AA(2) or 681AB(2), that is subject to the restriction.

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