Jurisdiction(s):
United Kingdom

Key definition

Lease definition

What does Lease mean? In practice, a lease is an agreement by which a landlord grants a tenant exclusive possession of land or premises for a period, usually for rent. It creates the landlord–tenant relationship and a proprietary estate/right, unlike a licence. Across England & Wales and Northern Ireland, the test (Street v Mountford) centres on exclusive possession and a term certain; rent is not essential. Leases over three years generally require a deed; longer terms are registrable (in E&W, over seven years). Business tenancies may attract statutory security of tenure (E&W: Landlord and Tenant Act 1954; NI: Business Tenancies...

Direct tax on lease grants in the UK: landlord and tenant income and CGT, short lease and deemed premiums, wasting assets, capital allowances and reverse premiums

Published by a LexisNexis Tax expert

Practice notes

Practice Note

Across England and Wales, Scotland and Northern Ireland, leases sit at the core of any UK property-related business. Interests in land of any meaningful duration are commonly structured as leases, allowing landlord and tenant to benefit from the legal rights and obligations that accompany that relationship. While the legal mechanics of granting a lease operate in the same way in all cases, there is no single tax outcome for a grant. The tax position of the landlord granting the lease, and the tenant to whom it is granted, depends on their particular circumstances and on the features of the lease itself. This Practice Note considers only the direct tax position (income tax, corporation tax and CGT) on the grant of a lease. In this note, CGT is used to mean both capital gains tax and corporation tax on chargeable gains. For the direct tax treatment of the assignment or surrender of a lease, see Practice Note: Direct tax treatment of leases—assignments, surrenders and variations...

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Charles Goddard

Rosetta Tax

Charles is a solicitor at Rosetta Tax Limited, which specialises in corporate tax advice to businesses and professional services firms. He has a broad range of tax advisory expertise, having acted for a variety of UK-based and international financial institutions and listed companies. He has particular expertise in the real estate and finance sectors, with a strong focus on the taxation of insolvency and restructuring transactions.Charles was for six years until 2012 a tax partner at Berwin Leighton Paisner LLP. Prior to joining BLP, he spent eight years at Slaughter and May as a trainee and associate in their Tax group. He is recommended by both Chambers and Partners and Legal 500....

Web page updated on 21/05/2026

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Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

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