When a lease, which is the relevant interest in a building,
terminates the following rules apply:
If the lessee remains in possession of the building with the
lessor's consent without a new lease being granted, the lease that
has terminated is treated as continuing for as long as the lessee
remains in possession.
If there was an option, in the lease that has terminated, for
the lessee to be granted a new lease and the lessee exercises that
option, the new lease is treated as a continuation of the old
lease.
If the lessor pays a sum to the lessee when the lease
terminates in respect of the building, the lease that was
terminated is treated as if it had come to an end by the lessee
surrendering it in return for the sum that the lessor has paid him.
If another lease is granted to a different lessee when the
lease terminates and the new lessee pays a sum to the original
lessee in connection with the transaction, the two leases are
treated as if they were the same lease and as if that lease had
been assigned by the old lessee to the new lessee in return for the
sum which he or she received.
Example Cass leases a qualifying building from
Ollie. Cass’s lease is the relevant interest in the
qualifying building.
In the BPRA legislation,
lease includes an agreement for a lease, but only
where the term to be covered by the lease has begun, and any
tenancy. It does not include a mortgage.
In Scotland leasehold interest means the interest of a tenant
in property subject to a lease.
