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HMRC internal manual

Capital Gains Manual

Leases: introduction: other definitions relating to leases

  • Premium: a premium is a capital sum paid for the grant of a lease. The payment may be made in money or money’s worth.

In Scotland `premium’ includes a grassum payable to any landlord, or intermediate landlord, on the grant of a sub-lease.

  • Rack Rent: a rack rent is the maximum rent which can be obtained under a particular lease. It is equivalent to a `full market rent’.
  • Lessor: a lessor is a person who grants a lease (otherwise known as a landlord).
  • Lessee: a lessee is a person taking a lease (otherwise known as a tenant).