Commentary

C2.1231 Deemed premiums for surrender of lease

Capital gains tax
Capital gains tax | Commentary

C2.1231 Deemed premiums for surrender of lease

Capital gains tax | Commentary

C2.1231 Deemed premiums for surrender of lease

A sum payable by a tenant under the terms of a short lease in consideration for the surrender of that lease is taxed as income of the recipient at the time the sum is payable as income of a property business, computed by a formula similar to that used for a premium1.

For capital gains purposes, such a sum is deemed to be a premium received by the landlord (in addition to any other premium) received at the time the sum is payable2. The deemed premium is treated as consideration for a separate transaction

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