Corporation Tax Act 2010 section 205

Meaning of qualifying interest in land

Section 205 defines what constitutes a "qualifying interest in land" for the purposes of corporation tax relief on disposals of land to charities, and sets out how certain types of disposal are treated.

• A qualifying interest in land means either a freehold interest or a leasehold interest (being a term of years absolute) in land in the United Kingdom, but agreements to acquire a freehold or agreements for a lease do not qualify.
• Where a company disposes of both its beneficial interest in the land and an associated easement, servitude, right or privilege benefiting the land to a charity, the disposal of the easement or right is treated as a separate disposal of a qualifying interest in land.
• Where a company with a freehold or leasehold interest grants a lease for a term of years absolute to a charity over the whole or part of the land, the grant is treated as a disposal of the whole beneficial interest in the leasehold interest created, even though the company retains the reversion.
• Specific provisions adapt the terminology for Scotland, so that references to freehold interests mean the interest of the owner, leasehold interests mean a tenant's right over or interest in a property subject to a lease, and missives of let constituting an actual lease are not treated as mere agreements for a lease.

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