Leases: insurance receipts: ESC D1
ESC/D1 provides that a capital sum received by a lessee under a policy of insurance should not be treated as a part-disposal of the lease if all the following conditions are satisfied:
- the property is held on a short lease, see CG70752;
- the lessee receives a sum under an insurance policy in respect of damage to the property;
- the terms of the lease oblige the lessee to make good the damage to the property; and
- that sum is used by the lessee to make good the damage to the property.
This concession has been legislated by Finance Act 1996 to apply to capital sums received on or after 6April1996, see CG15725.