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?
- SATR won't match P14 - what would you do? 49 2
- Glass-half-full member of the year? 268 11
- Playstation 4 - Allowable expense or not? 3,236 64
- Help needed.... 70 2
- Claiming salary pre incorporation 39 1
- Quirky thread of the year: Community Awards 394 7
- Freight Forwarders - VAT 111 4
- Non sequitur 356 4
- The complete uselessness of the British banking system 331 6
- HMRC website error 171 1
- Fixed asset registers 162 7
- Experience with Islamic investor following Sharia-compliant rules? 667 1
- Has anyone got copies of the Tolley's CTA study manual pdfs from last year? 172 3
- Entrepeneurs Relief 94 1
- Opening balance and suspense account on sage line 50 36 1
- Incorrect Generic non-filing notice 301 10
- What is wrong with HMRC? 346 3
- Very Difficult to type on Aweb again 270 8
- Boffin of the Year 473 15
- Dormant company owns shares in another company 225 6
- Desperately seeking Susan, Sam or anyone with any other name 1,325
- Darwinpay Partnership Assessment 427
- S464A Charge to tax: conferring benefit & BIK 344
- Alphabet shares 226
- Agent fees to sell business 221
- ACCA continuity of practice arrangement needed 214
- Office recharges 175
- How to reclaim VAT for a non-EC UK visitor 159
- Charge out rates in London 151
- which entity 144