Rent-factoring scheme – whether lump sum received as income or capital
Rent-factoring scheme – whether lump sum received as income or capital
Q An owner of an investment property, who wishes to raise money without selling or mortgaging the property itself, proposes to sell to a bank the right to receive the rent for the next five years. Could the Revenue claim that the lump sum so received has to be taxed as income?
A No: see Inland Revenue Commissioners v John Lewis Properties plc [2002] EWCA Civ 1869; [2003] PLSCS 20, a majority decision of the Court of Appeal discussed by Huw Witty, of Richards Butler, in Take factors into account Estates Gazette 22 March 2003, p125.
