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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Leases: introduction: duration of a lease: special rules

TCGA92/SCH8/PARA8

TCGA92/SCH8/PARA8 contains special rules which determine the duration of a lease in particular cases. Those rules are explained in Para8 (2) - (5).

TCGA92/SCH8/PARA8 (2)

The terms of the lease may allow the landlord to bring it to an end at some time before the end of its stated term. Such a lease should be treated as having been granted for a term ending on the earliest date that it could be terminated by the landlord (unless the rule in Para8 (3)&(4) provides that it should be treated as having been granted for a shorter term).

TCGA92/SCH8/PARA8 (3) & (4)

The terms of the lease may make it unlikely that it will continue beyond a particular date. Such a lease should be treated as having been granted for a term ending on that date (unless the rule in Para8 (2) provides that it should be treated as having been granted for a shorter term).

An example of the rule in Para8 (3)&(4) would be where at a particular date the rent was due to rise to a level which was likely to greatly exceed the normal commercial rent for that property.

TCGA92/SCH8/PARA8 (5)

The provisions of the lease may allow the tenant to extend it beyond its stated term. Such a lease should be treated as having been granted for the extended term (unless either of the rules in Para8 (2) or Para8 (3)&(4) provides that it should be treated as having been granted for a shorter term).

TCGA92/SCH8/PARA8 (6)

When the duration of a lease needs to be determined, it must be determined by reference to the facts which were known at the date on which it was granted.