Only certain leases which are disposed of are affected. Disposals of freeholds are unaffected. A number of conditions have to be met in order for Ch. 2 to apply. These conditions relate to the original lease and the new lease, which are taken in turn.
The original lease
At the time of the disposal the lease of land must have 50 years, or less, to run. The lessee of this ‘original lease’ must be entitled to relevant income tax relief in respect of the rent under the lease.