Leases: grant of lease out of short lease: part of land sub-let
- a short lease is granted out of a short lease, and
- the sub-lease covers only part of the land covered by the original lease
the amount of the allowable expenditure on the grant of the sub-lease is reduced.
There are a number of stages in the calculation.
i) The amount of the premium chargeable as property income must be calculated, see CG70900.
ii) The fraction of the total allowable expenditure attributable to the part disposed of is calculated on A/A+B lines, see CG12730+.
iii) The part of the expenditure which will waste away over the term of the sub-lease is calculated, see CG71001.
iv) Any restriction due if the actual premium is less than the `notional full premium’ is calculated, see CG71007.
v) All the above factors are combined.
Any valuations which are required should be obtained from the Valuation Office Agency. The request should be made by way of a memo setting out the full facts, no special form is provided.