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A lease is the right to use an asset. Where the asset in question is land or buildings, the lease is the right to occupy the land or buildings for a specified period of time, usually in return for a specified rent.

Contrast this to a freehold, which is the outright ownership of the property and the land upon which it is built. Freehold and leasehold are separate assets and, as such, a lease can be bought and sold in its own right as well as granted (ie created from a freehold or another leasehold).

This guidance note considers the capital gains tax position on:

1. •

   assignment of a long lease (over 50 years to run)

2. •

   assignment of a short lease (50 years or fewer to run)

3. •

   grant of a long lease

4. •

   grant of a short lease

Assignment is the legal term for disposal of a lease.

Disposals of leases may need to be reported and any estimated capital gains tax paid with 60 days of