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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Short leases: disposal: wasting of allowable expenditure: part-years


It will often be the case that the duration of the lease at one or more of the relevant dates, that is the dates on which P(1), P(2) or P(3) need to be determined, is not an exact number of years. If that is the case, the formula used is still the same, but the factor (P(1), P(2) or P(3)) is:

The factor for the number of whole years plus 1/12th of the difference between that factor and the factor for the next highest number of years for each additional month (counting an odd 14 days or more as one month).


If a lease has 9 years, 9 months and 15 days to run, the factor becomes:

  Factor for 9 years: 43.154
Plus: number of whole months: 9
  odd 15 days count as one month: 1
  Factor for next highest number of years: 46.695
Factor for incomplete year: (46.695 - 43.154) x 10 = 2.951

Factor for 9 years, 9 months, 15 days = 46.105