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HMRC internal manual

Capital Gains Manual

Leases: introduction: other definitions relating to leases


Some other terms relating to leases are defined here:


Term Definition
Premium A capital sum paid for the grant of a lease. The payment may be made in money or money’s worth.
Reverse Premium A capital sum paid by the landlord in order to induce the tenant to enter into the lease. A payment made by a tenant, either to surrender or assign an onerous lease, may also be referred to as a reverse premium.
Grassum This is the Scottish equivalent of a premium.
Rack Rent The maximum rent which can be obtained under a particular lease. It is equivalent to a ‘full market rent’.
Lessor The person who grants a lease (otherwise known as a landlord).
Lessee The person taking a lease (otherwise known as a tenant).