Personal Tax

Assignment and grant of leases for capital gains tax

Produced by Tolley
  • 22 Mar 2022 09:42

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Assignment and grant of leases for capital gains tax
  • Assignment of a long lease
  • Assignment of a short lease
  • Grant of a long lease from a freehold or long lease
  • Grant of a short lease from a freehold or long lease
  • Short lease granted from a short lease
  • When does a lease end for tax purposes?
  • Valuations
  • Acquisition of leases
  • Extending a lease
  • More...

Assignment and grant of leases for capital gains tax

A lease is the right to use an asset. Where the asset in question is land or buildings, the lease is the right to occupy the land or buildings for a specified period of time, usually in return for a specified rent.

Contrast this to a freehold, which is the outright ownership of the property and the land upon which it is built. Freehold and leasehold are separate assets and, as such, a lease can be bought and sold in its own right as well as granted (ie created from a freehold or another leasehold).

This guidance note considers the capital gains tax position on:

  1. assignment of a long lease (over 50 years to run)

  2. assignment of a short lease (50 years or fewer to run)

  3. grant of a long lease

  4. grant of a short lease

Assignment is the legal term for disposal of a lease.

Disposals of leases may need to be reported and any estimated capital gains tax paid with 60 days of the conveyance of the land. See the Disposals of UK land ― capital gains tax compliance regime guidance note.

Whether or not the disposal has already been reported to HMRC, if a self assessment tax return is required, the disposal should be reported on the capital gains summary supplementary pages. Computations of the chargeable gain or allowable loss must be submitted with the tax return.

When calculating the capital gain or loss, you should consider the HMRC ‘Capital gains tax

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

There's no margin for error. Think Tax.
Think Tolley.

TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.


Popular Articles

Income tax during administration

Liability of the personal representativesAfter a person’s death, the property of the deceased is vested in the personal representatives (PRs) to enable them to manage and distribute the estate in accordance with the Will or the terms of intestacy. See the Personal representatives guidance note.The

23 Mar 2022 10:52 | Produced by Tolley Read more Read more

Structures and buildings allowance

What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced

19 May 2022 07:01 | Produced by Tolley Read more Read more

Capital allowances computations

Plant and machinery allowancesThree types of allowance are available for expenditure on plant and machinery:•the annual investment allowance (AIA), which currently provides a 100% allowance for the first £1,000,000 of expenditure per year, see the Annual investment allowance (AIA) guidance

21 Mar 2022 07:23 | Produced by Tolley Read more Read more