Half Rent- is this is lease incentive?

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Have a lease being agreed which may include half rent for 6 months as well as 3 months rent free period.

I am aware that we need to spread the rent free period over the lease until the first break clause but do we need to reflect anything for the half rent? Should this also be treated as a lease incentive?

FRS 105 is used for this company.


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paddle steamer
12th Dec 2023 09:36

It is also just rent free.

In effect you have in total six months rent free, three months are applied when no rent is paid, 3 months are applied over six months when half rent is paid, total six months worth of rent.

We spread rent free over myriad periods, I had one where it acted as a reducer for the first five years (as a landlord I prefer the benefit to be extended out in time, obviously tenants prefer front end, it is all part of the negotiation to agree the heads of Terms as to over what period they will bite)

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John Toon
By John Toon
13th Dec 2023 09:25

Both of the things on offer are lease incentives as already identified, but your accounting for this up to the break clause is incorrect, and has been since FRS 102/105 were introduced. Lease incentives should be accounted for over the lease term.

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Replying to johnt27:
By Bobbo
13th Dec 2023 09:44


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