797. Leases.

The CGT rules governing leases are complex1.

Very generally, the provisions deal with two main issues:

  1.  

    (1)     the determination of gains or losses on the disposal of the lease by the lessee; and

  2.  

    (2)     the circumstances in which the grant of a lease is a disposal or part disposal by the landlord and how any gains should be computed2.

These rules apply generally to leases of movable and immovable property. Special computational rules apply on the disposal of a lease which has 50 years or less to run at the time of the disposal; such a lease is a wasting asset3.