Corporation Tax Act 2009 section 222

Lease premiums: assignments for profit of lease granted at undervalue

Section 222, which taxes profits arising when a lease originally granted at an undervalue is subsequently assigned, is subject to a transitional exemption for older leases.

• Section 222 charges tax when a person assigns a lease for more than they paid, where the lease was originally granted at below market value
• This charge does not apply to leases that were granted before 6 April 1963
• The charge also does not apply to leases granted under a contract that was entered into before 4 April 1963
• This transitional rule preserves the tax treatment that existed before the lease premium provisions were introduced