Sum paid by landlord

If a landlord makes a payment to a tenant to procure the surrender of a lease, that payment will qualify as allowable expenditure under TCGA92/S38 (1)(b), provided that it is reflected in the state or nature of the property at the date of its disposal by the landlord.

An example of such expenditure which would not be reflected in the state or nature of the property at the date of disposal would be where, following the surrender of the old lease, the landlord granted a new lease on essentially the same terms.

No allowance should be given to the landlord for any amount which has become chargeable on the tenant in accordance with CG71260.

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