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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Leases: capital loss arising on grant of short lease: restriction



  • a short lease is granted out of a short lease;
  • a capital loss arises; and
  • the holder of the original lease is entitled to relief under ICTA88/S37 (4), see AP1836,

the allowable loss is restricted by the amount of the relief given under ICTA88/S37 (4).

The way in which this works in practice is illustrated by the following example.