Assignment of a short term lease out of freehold
Two years ago my client raised money against her business property which is used by the family limited company. A lease was apparently drawn up although my client has no real recollection of this and the solicitor is now no longer in business. I was not consulted on the transaction. I guess that the lease was requested by the bank.
Move forward two years and the client is now under enquiry. The SDLT form is in the hands of the HMRC officer.
Having done a land registry search it is apparent that there is a 20 year lease. No rent or premium changed hands.
The inspector has said that because the granting of the lease was not "by way of a bargain made at arms length" then the company is deemed to have acquired the lease at market value and paid the "appropriate premium".
His argument sounds logical. I assme that he is technically correct?
He also states that "none of the deemed premium will be chargeable to tax under schedule A and the whole of the deemed premium will be brought into the computation of the gain arising on the grant of the lease". I assume that this is correct?
Is it possible to assign a market value to the premium?
I assume that I will need to get a professional valuer involved?
It would be appreciated if anyone can point me in the right direction?