106A Transfer of rent.

(1) (a) In this section—

“relevant transaction” means any scheme, arrangement or understanding under which a person becomes entitled to receive a capital sum and the consideration given for the entitlement to receive the sum consists wholly or mainly of the direct or indirect transfer to another person of a right to receive rent which, in the absence of the scheme, arrangement or understanding, could reasonably have been expected to accrue to the first-mentioned person or to a person connected with that person;

“rent” includes any sum which—

(i) is chargeable to tax under Case V of Schedule D, or

(ii) would be so chargeable if the source of the sum were in the State.

(b) For the purposes of this section, a scheme, arrangement or understanding under which a person grants a lease in connection with which—

(i) the person is entitled to a capital sum,

(ii) rent is payable to another person, and

(iii) the consideration given for the entitlement to receive the capital sum consists wholly or mainly of the grant to the other person or a person connected with the other person of a right to rent under the lease, shall be treated as a relevant transaction and this section applies as if the capital sum were a capital sum under the relevant transaction.

(2) (a) Subject to paragraph (b), where a person other than a company becomes entitled to receive a capital sum under a relevant transaction, the capital sum shall be treated for the purposes of the Tax Acts as being an amount of income of the person chargeable to tax under Case IV of Schedule D for the year of assessment—

(i) in which the person becomes entitled to the capital sum, or

(ii) if it is earlier, in which the sum was received.

(b) Paragraph (a) does not apply to a person, other than an individual, if the consideration for the capital sum—

(i) was given by the person, and

(ii) is a qualifying asset (within the meaning of section 110) acquired by a qualifying company (within the meaning of that section) in the course of its business.

(3) Any profits or gains arising by virtue of a relevant transaction to the person to whom the right to receive rent was transferred shall be computed in accordance with section 97, and shall, notwithstanding any other provision of the Tax Acts, be chargeable to tax under Case V of Schedule D: but this subsection does not apply in relation to a person if—

(a) the consideration received by the person for the capital sum is a qualifying asset (within the meaning of section 110) acquired by a qualifying company (within the meaning of that section) in the course of its business, and

(b) the asset was acquired from a person other than an individual.