Section 194 Leases.

United Kingdom

(1)

Where the claim relates to an interest which is the interest of a lessee under a lease the duration of which at the date of the death does not exceed fifty years, an addition shall be made to the sale price of the interest; and the amount of the addition shall be equal to the appropriate fraction of the value on death of the interest.

(2)

In subsection (1) above, “the appropriate fraction” means the fraction—

\frac{P (1) - P (2)}{P (1)}

where—

P(1) is the percentage that would be derived from the Table in paragraph 1 of Schedule F18 to the 1992 Act for the duration of the lease at the date of the death, and
P(2) is the percentage that would be so derived for the duration of the lease at the date of the sale.

Annotations

Textual amendments

F1: Words in s. 194 substituted (6.3.1992 with effects as mentioned in s. 289(1)(2) of the substituting Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 8(11) (with ss. 60, 101(1), 201(3)).

Notes on the whole Act

Textual amendments

F1: By Finance Act 1986 s. 100(1), on and after 25 July 1986 the Capital Transfer Tax Act 1984 may be cited as the Inheritance Tax Act 1984.