Compensation chargeable: displaced tenants: business tenancies
The compensation will however be within the scope of Capital Gains Tax in the following circumstances.
- If the notice to quit, or the notice opposing a request for a new tenancy, specifies grounds other than those contained in Section 30(1)(e), (f) or (g) L&TA 1954, see CG72334, the tenant will not be entitled to compensation under the L&TA unless he applies to the Court for a new tenancy and fails because the Court upholds one of the grounds in Section 30(1)(e), (f) or (g) L&TA 1954. Any compensation paid in such cases will not derive from the statute and must therefore derive from the disposal of the tenancy.
- If the tenancy agreement itself contains a provision for the payment of compensation on termination of the tenancy.