A tax partner at PricewaterhouseCoopers is welcoming changes to proposed legislation to make lease inducement payments taxable.
The payments are lump sums used by landlords to induce commercial tenants into signing leases.
The Government had intended to make the legislation retrospective, but after industry consultation it has decided the reform will apply to leases entered into from next April.
It has also decided to tax surrender payments, or the payments made by tenants to exit a lease early.
PwC tax partner Geof Nightingale says lease inducement payments have become more common in the economic downturn.
He says the Government has listened to submissions and made two positive changes.
Mr Nightingale says it has shifted the application date to being prospective, which is much better than having retrospective tax law.
"Secondly, they have now balanced the proposal by allowing the deductibility of termination payments, as well as taxing inducement payments."
The reform package will be included in a tax bill scheduled for introduction later this year.
