Taxes Consolidation Act 1997 Schedule 14 paragraph 2

Leases of land as wasting assets: restriction of allowable expenditure

Paragraph 2 sets out the rules for treating a lease of land as a wasting asset once it has 50 years or less to run, and restricts the allowable expenditure on disposal by reference to a statutory Table of depreciation percentages.

• A lease of land is only treated as a wasting asset once its remaining duration is 50 years or less.
• Expenditure wastes away in accordance with the Table to the paragraph, not on a straight-line basis.
• A special exception applies where the lease is subject to a sub-lease at less than full rental value.
• On disposal, a fraction of the original cost and of any later improvement expenditure is excluded from the allowable deduction.