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C2.1210 Disposal of a short lease of land—wasting of expenditure

Where a lease is a wasting asset, the full amount of the allowable expenditure is not deducted in calculating the chargeable gain on disposal, but is restricted. The expenditure is said to be 'wasted' over the term of the lease. For the general definition of a wasting asset see C2.901, and for the wasting of expenditure in respect of leases of assets other than land on a straight-line basis, including examples, see C2.902.

A lease of land is not a wasting asset until the time when its remaining duration does not exceed 50 years¹.

For such a lease (a 'short lease'), the straight-line method of writing off allowable expenditure does not apply. Instead expenditure is deemed to waste at a rate prescribed by statute². The effect is that wastage is deemed to be at a slow rate if a lease has almost 50 years to run, and it grows progressively more rapid as the end of the term of