F1PART 2ASTRUCTURES AND BUILDINGS ALLOWANCES
CHAPTER 4THE RELEVANT INTEREST IN THE BUILDING OR STRUCTURE
270DDLeases granted for 35 years or more
(1)
This section applies if—
(a)
qualifying capital expenditure has been incurred on the construction or acquisition of a building or structure,
(b)
a lease of the building or structure is granted out of the interest which is the relevant interest in relation to the qualifying expenditure, and
(c)
the effective duration of the lease is equal to, or exceeds, 35 years.
(2)
If the market value of the retained interest in the building or structure is less than one third of the capital sum given as consideration for the lease—
(a)
the lessee is treated, for the purposes of this Part, as acquiring the relevant interest in the building or structure on the grant of the lease, and
(b)
on the expiry or surrender of the lease, the lessor is treated, for the purposes of this Part, as acquiring the relevant interest from the lessee.
(3)
The capital sum given as consideration for the lease is treated for the purposes of subsection (2) as excluding the amount, in respect of any premium required to be paid under the lease, that is brought into account as a receipt in calculating the lessor’s profits for the purposes of ITTOIA 2005 or CTA 2009 (determined in accordance with section 277 of ITTOIA 2005 or section 217 of CTA 2009).
(4)
For the purposes of this section, the “effective duration” of a lease is to be determined in accordance with section 303 of ITTOIA 2005 or section 243 of CTA 2009.