Leases: Disposal: Introduction
There are two basic methods by which a disposal of a lease can take place:
Where a lease is assigned, the tenant passes all the benefits and obligations of the lease to the new tenant (‘the assignee’).
Where a lease is surrendered, it is passed back to the landlord and will normally merge with the landlord’s superior interest (that is, the landlord’s freehold or superior leasehold interest).
Whether a lease is assigned or surrendered, the tenant will have disposed of his entire interest in the lease. The guidance at CG71120 and CG71140P applies equally to assignments and surrenders. The guidance at CG71210 only applies to an assignment of a lease and the guidance at CG71230P only applies to the surrender of a lease.
A part-disposal of a lease will occur if the tenant grants a sub-lease of the whole or part of the property covered by the lease. This is a part-disposal because the tenant will have retained a part of his original interest in the property. The guidance on dealing with such cases is at CG70950P and CG71000P.
There will also be a disposal or part-disposal of the lease if a capital sum is derived from it, TCGA92/S22.