(ITTOIA 2005, s. 277 and CTA 2009, s. 217)

(In-depth: ¶300-120 and ¶711-375)

Where a short-term lease, (i.e. one not exceeding 50 years in duration) is granted, a proportion of any premium charged on the grant is assessable as property business profits. The amount of the premium to be treated as rental income, received at the time of the grant, is given by a formula:

P ×

50 − Y

= TP



‘P’ is total premium paid;

‘Y’ is duration of lease in complete years (ignoring the first year). Only whole years are counted, part years are ignored; and

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