Capital Allowances Act 2001 section 329

Capital value that is attributable to subordinate interest

Section 329 defines the circumstances in which capital value is considered attributable to a subordinate interest in land, and provides anti-avoidance rules to ensure that market value is used where transactions are at undervalue or no value.

• Capital value is attributable to a subordinate interest when payments are made for the grant, in lieu of rent, for the assignment of rent, or for the surrender, variation, or waiver of the interest's terms
• Where no premium or a below-market premium is paid for the grant and no commercial rent is payable, the rules deem the commercial premium to have been paid
• Where amounts paid in lieu of rent, for the assignment of rent, or for surrender, variation, or waiver are below the commercial amount (or nothing is paid at all), the commercial amount is deemed to have been paid
• No capital value is attributable to the subordinate interest if the payment relates to the grant of a lease exceeding 50 years that is elected to be treated as a sale under section 290