Premium received of £40973 on extending a 100 year lease to 950 years.
What are the CGT implications, in particular how do I calculate the cost, please?
Thanks
C
Colin
Replies (2)
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Premium recd on long lease extension
I too have a client who has granted an extension to a lease from 70 to 99 years.
Can you confirm that TN was correct in his answer.
Many thanks
Martin
Part disposal
It's been a long time since I looked at this, but from memory, I believe the situation is as follows:
This is a part disposal by the freeholder. The proceeds are the premium received (£40,973);
The cost is calculated using a part disposal A/A+B calculation. "A" being £40,973 and "B" being the valuation of the current residual value of the freehold interest including the right to any rent etc. You will need a valuer to establish this value.
If the leaseholder was entitled to extend the lease, then the extension may be a compulsory acquisition and your freeholder may be entitled to some form of rollover under s247 TCGA.