The Rentcharges Act 1977 prohibits (with minor exceptions) the
creation of further rentcharges in England and Wales after 21
August 1977. Existing rentcharges will be extinguished at the end
of 60 years unless the payer chooses to redeem the rentcharge by
making a payment to the rent owner before that date. The Act does
not apply to settled land.
A rentcharge (sometimes called a chief rent) is defined in Section 1 as an annual or periodic sum charged on or issuing out of land. It does not include either a rent reserved by a lease or tenancy, for example, a ground rent under a long lease, or interest, for example, payable on a mortgage of land.
A rentcharge is normally regarded as a deductible expense in computing the profits of a trade or profession assessable under Schedule D. Redemption payments are considered to be capital payments to free the land from a detriment. Unless the land is stock in trade of a dealer in land, therefore, no deduction should be given in arriving at trading profits or income from land.
As regards CG, see CG14507 and CG15292.