SCHEDULES
SCHEDULE 2Transitionals and savings
Part 7Property income
Lease premiums: rules for determining effective duration of lease
43
1
In relation to a lease granted after 24 August 1971 and before 1 April 2009, section 243 applies with the following modifications.
2
In subsection (1) for Rule 1 substitute—
Rule 1: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted if—
a
the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date, and
b
the premium was not substantially greater than it would have been had the term been one ending on that date.
3
Omit subsection (3).
44
The amendments made by paragraph 626 of Schedule 1 (amendments of section 303 of ITTOIA 2005, which provides rules for determining the effective duration of a lease) do not have effect in relation to leases granted before 1 April 2009.
45
1
In relation to a lease granted after 12 June 1969 and before 25 August 1971, for sections 243 and 244 substitute—
243Rules for determining effective duration of lease
1
The following rules apply for determining the effective duration of a lease for the purposes of this Chapter.
Rule 1: Where the terms of a lease include provision for the determination of the lease by notice given by the landlord, the lease is not to be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice so given.
Rule 2: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted, if the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date.
Rule 3: Where the terms of the lease include provision for the extension of the lease beyond a given date by notice given by the tenant, account may be taken of any circumstances making it likely that the lease will be so extended.
2
Rule 2 applies by reference to the facts known or ascertainable at the time of the grant of the lease.
3
In applying the rules, it is assumed that all parties concerned, whatever their relationship, act as if they were at arm's length.
4
In this section, in relation to Scotland, “term”, where referring to the duration of a lease, means period.
2
This paragraph does not apply if the determination is for the purposes of section 221 (sums payable for variation or waiver of terms of lease).
46
1
In relation to a lease granted before 13 June 1969, for sections 243 to 245 substitute—
243Rules for determining effective duration of lease
1
The following rules apply for determining the effective duration of a lease for the purposes of this Chapter.
Rule 1: Where the effective duration of a lease is being determined after the date on which the lease has for any reason come to an end, the duration is taken to have extended from its commencement to that date.
Rule 2: Where the terms of the lease include provision for the determination of the lease by notice given either by the landlord or by the tenant, the lease is not to be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice.
Rule 3: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted, if the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date.
2
Rules 2 and 3 are subject to Rule 1.
3
Rules 2 and 3 apply in accordance with circumstances prevailing at the time of the determination.
4
In this section, in relation to Scotland, “term”, where referring to the duration of a lease, means period.
2
This paragraph does not apply if the determination is for the purposes of section 221 (sums payable for variation or waiver of terms of lease).
47
The amendments made by paragraphs 498 and 506 of Schedule 1 (amendments of sections 291(3)(a) and 393J(3)(a) of CAA 2001) do not have effect in relation to leases granted before 1 April 2009.