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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Compensation: displaced tenant: business tenancy: terminated by agreement

The landlord and tenant may together apply to the Court under Section 38(4) L&TA 1954 to terminate the tenancy in a manner which is not provided for by the statute. This route will often be taken if the landlord needs an early surrender of the tenancy in order to sell the property to a developer, or to redevelop it himself. In such circumstances, the landlord will often be prepared to pay more to the tenant for a surrender of the remainder of the tenancy than the tenant would receive if the tenancy was terminated in accordance with the L&TA 1954.