CG70703 | Leases: introduction: what is a lease of land?

A lease is the right to physically occupy a particular piece of land for a fixed term. That term may be for any period of time, but the period must be specified in the lease. When that term comes to an end, the rights under the lease revert back to the holder of the superior interest, for example the freeholder. That superior interest is called the ‘reversionary interest’ or the ‘reversion’.

For CGT purposes, the term ‘lease’ includes interests which in land law would not be leases, see CG70750.

A lease will normally require the payment of rent, even if that rent is a nominal one. If no rent is paid, it is unlikely that the agreement will amount to a lease.