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HMRC internal manual

Capital Gains Manual

Leases: part of premium chargeable as property income

ITTOIA05/S287 and CTA09/S227

Where a premium is paid for a short lease, that is a lease of not more than 50 yearsduration, part of that premium will be chargeable as property income, seePIM1200+. The amount chargeable as income is arrived at by the following formula:

P - (P x Y)

P is the amount of the premium;

Y is the number of years, other than the first, in the term of the lease.