lappylou
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CGT on sale of Ground Rents

What wrinkles are there to watch for in computing tax on disposal of ground rents

I have a client who inherited a hundred or so ground rents, spread over 8 properties.  I believe most of the leases had more than 50 years to run but a couple of sizeable ones were less.  The leases were offered to tenants and the majority acquired them but some were sold to investors.  As I see it, the "sale of the ground rents" is a misnomer in that presumably it was the freeholds (or fractions of freehold in the case of apartments) that were valued and the freeholds that were sold, regardless of whether the buyer was the tenant or an investor.  The client has been doing some reading and seems to think that the disposals were lease assignments but I believe that they are wrong as the client retained no further interest in the properties, so the freeholds have gone.  I have yet to see all of the paperwork but assume that the probate valuations must have been for the freeholds, albeit split into individual ground rents for the purposes of calculation.  I understand that all have been sold so there should be no issue with retained value etc.  Assuming I am right, or even if I am wrong, are there any wrinkles of which I should be aware in doing the CGT work?  The total proceeds are near to £1 million and I don't want to get this wrong!

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20th Aug 2017 18:25

lappylou wrote:

The client ... seems to think that the disposals were lease assignments ...

Presumably the £1 million disposal was evidenced by some legal agreement. What does that say?

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to Accountant A
20th Aug 2017 19:44

Thanks. Absolutely. There were several buyers and several agreements and it was all handled by the family solicitor, who appears to have been knowledgeable and competent. I will be given a full set of schedules; I have seen some examples. Apologies for lack of specifics but I wanted to get the query up online asap.

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20th Aug 2017 18:39

lappylou wrote:

I have yet to see all of the paperwork but assume...

Don't. Use information, not guesswork. Especially if you don't want to get it wrong (!)
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