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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Employment income provided through third parties: relevant steps: Section 554C: grant of lease

Section 554C(1)(e) ITEPA 2003

A relevant third person (P) will take a relevant step within Section 554C(1)(e) if P grants to a relevant person (see EIM45090) a lease of any premises the effective duration of which is likely to exceed 21years.

‘Lease’ includes an agreement for a lease (so far as the context permits) and any tenancy, but does not include a mortgage.

‘Premises’ includes land.

Effective duration of lease

If there are circumstances which make it likely that the original lease will be extended for any period, you determine the effective duration of the original lease on the assumption that the original lease will be so extended.

You treat the original lease as continuing until the end of a later lease of the same premises (or of any premises which include the whole or part of the same premises) in the following circumstances.

  • A is entitled to such a later lease.
  • A is likely to become entitled to such a later lease.
  • A is entitled to the grant of such a later lease.
  • A is likely to become entitled to the grant of such a later lease.
  • A person ‘linked’ with A (see EIM45860) is entitled to such a later lease.
  • A person linked with A is likely to become entitled to such a later lease.
  • A person linked with A is entitled to the grant of such a later lease.
  • A person linked with A is likely to become entitled to the grant of such a later lease.