Corporation Tax Act 2009 section 256

Ending lease of premises

Section 256 deals with what happens to the entitlement to claim deductions for sea wall expenditure when a tenant's lease comes to an end before the full deduction period has expired.

• If a lease ends before the deduction period for sea wall expenditure is complete, the remaining entitlement to deductions transfers automatically to another party.
• Where a new lease is granted and the incoming tenant makes a payment to the outgoing tenant in respect of the sea wall or embankment, the new tenant takes over the entitlement to the remaining deductions.
• In all other cases — including where the lease is simply renewed to the same person — the entitlement passes to the owner of the interest in immediate reversion on the lease (or, in Scotland, the landlord).
• The provision ensures continuity of the tax relief so that the full deduction period is preserved even when the original tenant's interest in the premises ceases.