Corporation Tax Act 2009 sections 43–47

Lease premiums: rules for determining effective duration of lease

Sections 43–47 of Schedule 2 set out transitional rules for determining the effective duration of a lease for the purposes of the lease premium provisions, with different rules applying depending on when the lease was granted.

• Different rules for determining a lease's effective duration apply across four historical periods: before 13 June 1969, between 13 June 1969 and 24 August 1971, between 25 August 1971 and 31 March 2009, and from 1 April 2009 onwards.
• For leases granted between 25 August 1971 and 31 March 2009, a lease's effective duration may be shortened if it was unlikely to continue beyond an earlier date and the premium was not substantially greater than it would have been for that shorter term.
• For older leases (pre-25 August 1971), additional rules apply, such as treating a lease as ending at the earliest date a landlord (or tenant) could give notice to terminate, and taking account of circumstances that might extend or shorten the lease.
• Amendments made by the Corporation Tax Act 2009 to the Income Tax (Trading and Other Income) Act 2005 and to the Capital Allowances Act 2001 in respect of lease duration rules do not apply to leases granted before 1 April 2009.