Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Leases: granting of a lease: premiums

A premium is a capital sum paid to the landlord on the granting of a lease. A premium will normally be met where the rent payable under the lease is less than a full market rent. It will usually take the form of a cash payment but it could be in the form of money’s worth, for example the tenant may agree to undertake certain work on the landlord’s behalf and for the landlord’s benefit.

In Scotland, a premium is usually called a grassum.

TCGA92/SCH8/PARA10 (2) & (3)

The full definition of the term ‘premium’ for Capital Gains Tax purposes is contained in TCGA92/SCH8/PARA10 (2) and (3), and includes any like sum, whether payable to the intermediate or a superior landlord.

Any sum (other than rent) paid on or in connection with the granting of a tenancy is presumed to have been paid by way of premium except where it can be shown that other sufficient consideration for the payment has been given.