Chapter 5 of Part 3 of ITEPA 2003 (taxable benefits: living accommodation) is amended as follows.
In section 105 (cash equivalent: cost of accommodation not over £75,000)—
in subsection (3), after "is" insert , and" (subject to subsections (4) and (4A)) "
for subsection (4) substitute—4Subsection (4A) applies where—aa rental amount is payable by the person ("P") at whose cost the accommodation is provided in respect of the whole or part of the taxable period ("the relevant period"), andbthe amount so payable is payable at an annual rate greater than the annual value.4AWhere this subsection applies—asubsection (3) does not apply to the relevant period, andbinstead the "rental value of the accommodation" for the relevant period is the rental amount payable by P in respect of the relevant period.4BA reference in subsection (4) or (4A) to a rental amount payable by P in respect of the relevant period is to the sum of—aany rent for the period payable by P, andbany amount attributed to the period in respect of a lease premium (see sections 105A and 105B).
After that section insert—
The amendments made by this section have effect in relation to—
any lease entered into on or after 22 April 2009, and
subject to subsection (5), any lease entered into before that date the term of which is extended on or after that date.
In relation to a lease of the kind mentioned in subsection (4)(b) the amendments made by this section have effect—
as if the additional term of the lease created by the extension were the whole of the term of the lease, and
ignoring any lease premium payable in respect of the unextended term of the lease.
In this section "lease premium" has the same meaning as in sections 105A and 105B of ITEPA 2003.