Income Tax (Trading and Other Income) Act 2005 section 317

Ending of lease of premises

Section 317 deals with what happens to the remaining sea wall expenditure deduction when a tenant's lease ends before the full deduction period has expired.

• If a lease ends before the deduction period for sea wall expenditure is fully used up, the entitlement to the remaining deductions is treated as transferred to another party.
• Where a new lease is granted and the incoming tenant pays the outgoing tenant for the sea wall or embankment work, the new tenant takes over the remaining deductions.
• In all other cases — including where a lease is simply renewed to the same person — the remaining deductions pass to the owner of the interest immediately above the lease (or, in Scotland, the landlord).
• For these purposes, a "lease" means a lease of land conferring exclusive possession; leases of incorporeal rights such as sporting rights or rights of way are not relevant.