Taxation of Chargeable Gains Act 1992 section Schedule 8 paragraph 9

Leases of property other than land

Section Schedule 8 paragraph 9 extends the capital gains tax rules that apply to leases of land so that they also cover leases of other types of property, such as equipment or machinery, with adjustments to prevent double taxation and to deal with wasting assets.

• The rules on premiums for leases, sub-leases out of short leases, and lease duration that apply to land leases also apply to leases of other property, with any necessary modifications.
• Where income tax has already been charged on a capital sum received in connection with a lease of a non-land asset, that taxed amount is deducted from any chargeable gain arising on the disposal, to avoid being taxed twice on the same amount.
• The deduction for income tax already paid cannot turn a gain into a loss or increase an existing loss — it can only reduce a gain down to nil at most.
• Where a lease relates to a wasting asset that is moveable property, the lease is assumed to end no later than the end of the useful life of the asset itself.