Section 850: New lease after assignment or surrender
2509.This section states when this Chapter applies. It is based on section 780(1), (7) and (9) of ICTA.
2510.Subsection (1) provides that five conditions must be met if the Chapter is to apply. If, in a given case, the reader is satisfied that at least one of these conditions is not met, the reader need read no further in this Chapter.
2511.Subsection (2) specifies condition A, concerning the original lease.
2512.The word “lessee” appears in subsection (2)(a) for the first time in this Chapter. On the meaning of “lessee” in this Chapter, see section 862.
2513.The expression “a deduction by way of relevant corporation tax relief” appears in subsection (2)(b) for the first time in this Chapter. It is defined in section 860.
2514.Subsection (3) specifies condition B, concerning the assignment or surrender of the original lease. Section 1166 provides that in the application of the Corporation Tax Acts to Scotland “assignment” means assignation. This gives effect to the application of section 24(5) of ICTA by section 780(8) of that Act. Section 1166 also provides that in the application of the Corporation Tax Acts to Scotland “surrender” includes renunciation.
2515.Subsection (4) specifies condition C, concerning the new lease.
2516.The expression “a person linked to L” appears for the first time in this Chapter in subsection (4)(a). It is defined in section 861. See further the commentary on section 851(6) and (7).
2517.Subsection (5) specifies condition D, concerning the relationship between the new lease and the original lease.
2518.Condition E in subsection (6) preserves the rule that, if, before the legislation was introduced, there was a legal or equitable right to the grant of a new lease, then the grant of the new lease does not activate the legislation.
2519.Subsection (7) signposts the transitory provision based on the second limb of section 780(9) of ICTA. The “relevant provisions” are the paragraphs headed “New lease of land after assignment or surrender: right to new lease existed pre-22 June 1971 ” in the “sale and lease-back etc” Parts of Schedule 2 to this Act and Schedule 9 to TIOPA.
