Chapter CG70250
| Published date | 12 March 2016 |
| Record Number | CG70250 |
There are many interests in land which are lesser in nature than a freehold interest. The main ones, in England and Wales, are:
- leases
- licences
- easements
- profits-à-prendre.
Brief descriptions of each of these interests follow below.
In Scotland, a real right over land is equivalent to a freehold interest. Leases also exist but the legal requirements to create them and their nature differ in Scotland. Licences in Scotland have a more limited meaning than in England and Wales. Servitudes in Scotland are broadly equivalent to easements in England and Wales.
Commonhold is a further interest in land and is described below.
LeasesA leasehold interest will entitle its holder to exclusive possession of the property for a particular term.
A freeholder may grant a lease of any duration. A leaseholder may, subject to the landlord’s consent, grant a sub-lease for any period less than the remaining term of the lease.
However if the holder of a lease is to have a legal interest in the land, the lease must be granted by deed. If it is not, the lessee will have, at best, only a beneficial interest in the land (although this will be the relevant interest for CGT purposes, see CG11730).
An agreement for the grant of a lease results in the lessee acquiring a beneficial interest in the land if:
- the lessee has given valuable consideration for the agreement; and
- the agreement is either in writing, or is supported by acts of part-performance, for example if the lessee occupies the property with the consent of the lessor.
For CGT purposes, there are special rules in TCGA92/SCH8 for dealing with leases, see CG70700P. For those purposes, the term `leases’ includes any licence or agreement for a lease.
LicencesA licence gives far more restricted rights than a lease. For example, it does not normally give an interest in land to the licensee, nor does it grant the right of exclusive possession.
There are three types of licences over land:
- a bare licence - such a licence is given without consideration on the part of the licensee and may be revoked at any time;
- a licence coupled with an interest - for example where the right to take standing timber from land is granted, a licence to go on to the land to cut the timber is necessarily implied;
- a licence of value - consideration is paid by the licensee but no interest in the...
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