Corporation Tax Act 2010 (c. 4)

Part 19 U.K. Sale and lease-back etc

Chapter 2 U.K. New lease of land after assignment or surrender

Modifications etc. (not altering text)

C1 Pt. 19 Ch. 2 applied by 2007 c. 3, s. 681BD(4) (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 4 para. 3 (with Sch. 9 paras. 1-9, 22))

Application of the Chapter U.K.

850 New lease after assignment or surrender U.K.

(1) This Chapter has effect if each of conditions A to E is met.

(2) Condition A is that—

(a) a company (“L”) is a lessee of land under a lease which has 50 years or less to run (“the original lease”), and

(b) L is entitled in respect of the rent under the original lease to a deduction by way of relevant corporation tax relief.

(3) Condition B is that—

(a) L assigns the original lease to another person or surrenders it to L's landlord, and

(b) the consideration for the assignment or surrender would not (apart from this Chapter) be taxable except as capital in L's hands.

(4) Condition C is that—

(a) another lease (“the new lease”) is granted, or assigned, to L or a person linked to L, and

(b) the new lease is for a term of 15 years or less.

(5) Condition D is that the new lease—

(a) is of all or part of the land which was the subject of the original lease, or

(b) includes all or part of the land which was the subject of the original lease.

(6) Condition E is that neither L nor a person linked to L had, before 22 June 1971, a right enforceable at law or in equity to the grant of the new lease.

(7) If each of conditions A to D is met but condition E is not met, see the relevant provisions in Schedule 2 to this Act and Schedule 9 to TIOPA 2010.