Section 850 — Corporation Tax Act 2010: New lease after assignment or surrender

New lease after assignment or surrender 850 1 This Chapter has effect if each of conditions A to E is met.

2 Condition A is that—

a a company (“L”) is a lessee of land under a lease which has 50 years or less to run (“the original lease”),

and b L is entitled in respect of the rent under the original lease to a deduction by way of relevant corporation tax relief.

3 Condition B is that—

a L assigns the original lease to another person or surrenders it to L's landlord, and b the consideration for the assignment or surrender would not (apart from this Chapter) be taxable except as capital in L's hands.

4 Condition C is that—

a another lease (“ the new lease ”) is granted, or assigned, to L or a person linked to L, and b the new lease is for a term of 15 years or less.

5 Condition D is that the new lease—

a is of all or part of the land which was the subject of the original lease, or b includes all or part of the land which was the subject of the original lease.

6 Condition E is that neither L nor a person linked to L had, before 22 June 1971, a right enforceable at law or in equity to the grant of the new lease.

7 If each of conditions A to D is met but condition E is not met, see the relevant provisions in Schedule 2 to this Act and Schedule 9 to TIOPA 2010.