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Operating lease - Property

  • 06-07-2015 6:41pm
    #1
    Lucie471
    Registered Users, Registered Users 2 Posts: 1 ✭


    Hi,

    If an office block which is currently in a derelict state was let out for 10 years for no rent but imposed on the lessee, a requirement to invest capital in doing up the the office block (to the same value as market rent), would it be correct that this would be considered a lease premium(increase in lessors interest) (S.98) less a deduction for the rent forgone?


    If there is a clause in the contract that at the end of the lease, if required the tenant would have to return the property back to the original state( therefore on the tenants balance sheet till transferred back to lessor), would
    (A)the market rent forgone still be treated as a premium under a lease, and treated as profits by the assignor (S.99)
    (B)If the property is not put back to its original condition, would the increase in value of the property give rise to CGT at the date the lease ends and transferred back to lessor.


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