Where a lease is assigned (see PIM1204), the assignee becomes
the person entitled to the
lease, estate or interest in land.
If, in such a case, the assignee carries on a trade in those
premises, the assignee inherits their predecessor's title to a
trading deduction.
The facts are the same as the example in
BIM46255, except that when B vacates the
property after ten years, B assigns his lease to C instead of
granting C a sub-lease. The consideration for the assignment is
£100,000.
C inherits B's entitlement to a trading deduction of
£8,572 per annum for eleven years (21 less 10) or for such
lesser period as C occupies the property for trade purposes. If
ICTA88/S35 (see PIM1222) does not apply, the sum of £100,000
paid by C to B as consideration for the assignment of the lease is
a capital payment which is not a premium chargeable on B and does
not rank as a trading deduction allowable to C.
