I have a client which is a RTM company owning the freehold of a block of flats. The lease provides for ground rent to be paid. As I believe quite commonly happens the Company has decided not to charge Ground Rent to its shareholders who are Leaseholders of the flats. They have effected this by passing a Board Resolution waiving their right to demand Ground Rent. The lease remains unchanged with the ground rent payable clause as was.
My question is, is there a possibility could HMRC demand CT on the waived rent? If so what action should be taken to rectify the claim?
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Principle of mutuality
I've just been reading section 4.3 and in my search to find more info I've ended up here. So I have a circular reference! Does anyone know more than what it states in section 4.3, eg what circumstances does this principle apply and when does it not? What if some leaseholders are members, but some not?