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Home / Simons-Taxes /Capital gains tax /Part C2 Computation of chargeable gains /Division C2.12 Leases and capital gains tax /Disposal of a lease / C2.1212 Disposal of a lease—extensions and mergers
Commentary

C2.1212 Disposal of a lease—extensions and mergers

Capital gains tax

Lease derived from a prior lease

By concession, no charge to capital gains tax arises in certain circumstances where a lease is extended by means of a surrender of the old lease and the grant of a new, longer lease of the same property to the same lessee1. The new lease is instead treated as having been acquired on the date that the original lease was acquired. The concession only applies where:

  1. Ìý

    •ÌýÌýÌýÌý the transaction is on terms equivalent to those that would have been made between unconnected parties bargaining at arm's length (whether or not the parties are in fact unconnected)

  2. Ìý

    •ÌýÌýÌýÌý the transaction is not part of, or connected with, a larger scheme or series

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