Chapter BIM46420

Published date22 November 2013
Record NumberBIM46420
Practical approach

Professional fees incurred on the renewal of a short lease with the owner’s consent are capital but are likely to be small; in which event you may allow them on de minimis grounds. Circumstances where the amounts may be larger and where you should contend, in appropriate cases, that the expenditure is of a capital nature include those where:

  • the new lease is for a long term (say, a period which exceeds, or may at the lessee’s option exceed, 50 years), or
  • there are provisions in the lease for the payment of a premium (or for equivalent capital outlay by the lessee). In practice, the disallowance may be limited to a proportion of the expenses of renewal appropriate to the premium etc.

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