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Home / De-Voil /Part V4 Exemption, zero-rating and reduced rates /Division V4.1 Exemption /Land and buildings / V4.110 Break clause in a lease agreement—the VAT treatment
Commentary

V4.110 Break clause in a lease agreement—the VAT treatment

Part V4 Exemption, zero-rating and reduced rates

A break clause in a lease agreement, sometimes known as a break notice or a break option, allows either or both of the parties to the lease to terminate it early, subject to meeting any conditions that the break clause may specify. The conditions typically provide that the party exercising the option to terminate the lease early must pay consideration to the other party.

If a landlord pays a tenant to terminate a lease early, it amounts to a surrender of the lease

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