Part 4

Property income
Chapter 4

Profits of property businesses: lease premiums etc

Amounts treated as receipts: leases

Provisions supplementary to section 222
223
1
This section operates for the purposes of section 222.
2
A lease is granted at an undervalue if the terms subject to which it was granted are such that the landlord who granted it could have required the payment of an additional sum by way of premium, or additional premium, for its grant.
3
The additional sum is the undervalue.
4
The test in subsection (2) must be applied—
a
having regard to values prevailing at the time the lease was granted, and
b
on the assumption that the negotiations for the lease were at arm's length.
5
A profit is made on an assignment of a lease if the consideration for the assignment exceeds—
a
if the lease has not previously been assigned, any premium for which it was granted, or
b
in any other case, any consideration for which it was last assigned.
6
The amount of the excess is the profit.
Pt. 4 Ch. 4 applied by 2010 c. 8, s. 436(8) (as inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1 (with Sch. 5 paras. 27, 32-34))