Section 499: Provisions applying on termination of lease
1788.This section is based on section 94 of CAA 1990.
1789.Subsection (1) does not reproduce section 94(1)’s reference to “capital expenditure” as the expenditure in relation to which there is a relevant interest. The equivalent in this Act would have been “qualifying expenditure”. But the different approach has no effect. If there is no qualifying expenditure there is nothing for this section, or Part, to act on.
1790.Subsections (2) and (3) treat a lease as continuing in certain circumstances. The rule prevents balancing adjustments being made in circumstances in which it would be inappropriate.
1791.Subsection (4) treats the relevant interest (the lease) as surrendered for consideration if the lessor makes certain payments to the lessee on the lease termination. Section 572(1)(b) will then treat the surrender of the lease as if it was a sale of the relevant interest. Section 514(a) then gives a balancing event on which any appropriate balancing adjustment can be made.
1792.Subsection (5) treats a new lease as the same lease as a terminated lease in the circumstances set out.
