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?
- Classic cars investment 209 6
- BrightPay 565 16
- VAT silly question 2,373 56
- Are sheepdog winnings taxable? 1,065 10
- VAT on sale of Vehicle 118 2
- What are CIS subcontractor clients worth to you ? 225 5
- Gift or Capital Gain? 243 6
- Federation Accounts 354 10
- SA302s - Lenders to accept non hmrc copies 530 8
- How does the tax payer dis-apply/disclaim from use of their personal allowance? 274 5
- Are Court and tribunal Judges honest/commit fruad ? 127 2
- Late reply from HMRC 248 2
- Client charged VAT by US supplier 283 6
- I think I'm developing an anger issue 2,662 34
- How long to prepare monthly management accounts 1,424 22
- Xero - am I missing something? 2,792 43
- paid or unpaid - who knows! 504 11
- Vat reclaim on invoice payable over 4 years 219 3
- New Company - Corp Tax Period 233 8
- RTI - new employee 193 3
- Benchmarking 486
- Possible Partnership? 428
- Tax and accounting treatment on long lease granted from freehold 406
- Lunatics in charge of the asylum - Bluestone 405
- Old Books for a 'NON' Client 346
- Purchase of property freehold - capitalisation of costs 203
- Growing Limited Company concerned about assets if something goes wrong 202
- Clubs and Taxable Income 184
- Income tax on foreign dividends 184
- Subsistence and hotel expenses 180