Surrender of tenancy - disposal value for fixtures

Surrender of tenancy - disposal value for fixtures

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Trading premises is owned by sole director/shareholder, who is to pay compensation to his company for the surrender of its lease. Upon obtaining vacant possession the property will be sold and the new owner will grant a new lease to the company.

In relation to the fixtures already incurred and installed by the tenant company, do readers agree that no disposal value for the fixtures needs to be brought into account for capital allowance purposes?

Although the company's current interest in the land is to cease (thereby ceasing to be the owner of the fixture [s.188 CAA 2001]), it would appear that no disposal event will occur by reason of s.189(3) CAA 2001. The new lease is treated as the same interest in the land. This would certainly so if the director/shareholder retained the property and granted his company a new lease but here there will be a different landlord, however I cannot see any requirement that the new lease has to be granted by the same person.

Can someone confirm that my analysis is correct?

Thanks.

Daren Peacock

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