Corporation Tax Act 2010 section 878

Sum obtained in respect of lessee's interest

Section 878 defines what counts as a "sum obtained in respect of the lessee's interest" in a lease of an asset for the purposes of the lease premium rules in this chapter.

• A sum obtained in respect of a lessee's interest includes consideration received when the interest is surrendered to the lessor, the lease is assigned, or a sublease or other interest is created out of the lease.
• It also covers money or money's worth received through any transaction or series of transactions that merge the lessee's rights with the lessor's rights or any other rights relating to the asset.
• The merger provision only applies to the extent that the money or value received is attributable to the lessee's rights under the lease.
• The definition is deliberately broad, capturing not only straightforward disposals but also indirect arrangements that effectively transfer the economic value of a lease interest.