Revenue Note for Guidance
This section outlines the various conditions which must be satisfied in order that a lease will be a qualifying lease for the purposes of the Chapter.
(1) “market value”, in relation to a building, structure or house, means the price which the unencumbered fee simple would fetch if sold in the open market less the part of that price attributable to site acquisition costs.
(2)(a) Provision is made that, subject to subsection (4), a lease of a house is a qualifying lease for the purposes of the Chapter where the lease provides only for normal rental payments taxable under Chapter 8 of Part 4.
(2)(b) If a premium is payable in addition to those payments, the premium must not exceed 10 per cent of the relevant cost of the house in the case of construction, or 10 per cent of the market value of the house at the time of completion of works in the case of conversion or refurbishment. In the latter case, the premium must be payable on or subsequent to the date of the completion of the refurbishment or, if payable before that date, must be payable by reason of or in connection with the refurbishment.
(3) In the case of conversion or refurbishment, provision is made for the apportionment of the market value of a building where a house is a part of a building and is not saleable apart from the building of which it is a part. This apportionment is of the market value at the time the works are completed and is done on a floor area basis.
A lease does not qualify for the purposes of Chapter 11:
Relevant Date: Finance Act 2021