Freehold or Leasehold

Capital gains roll over

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My mate Boris has said can he talk to me " pro bono style "

He says " Shall I replace my freehold factory with a larger freehold or a leasehold. 

I told him that if he invested all of the sale proceeds in a new freehold that he could defer the chargeable gain avoiding capital gains tax. The new freehold would be deemed to be the purchase price less the gain.  I said the leasehold option was a wasting asset and he would not escape tax on the gain. Boris manufacturers boilers and likes me because I was clever at school. 

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By Tax Dragon
17th Aug 2018 07:34

At the risk of DJKL thinking I am talking to myself (tbh Aweb often gives me that feeling), let's ask you part 2 of the exam question you are revising. See if you're still as clever as you were at school.

So Boris buys leasehold and claims relief under s154. The gain comes back into charge 10 years later. Could ER ever apply?

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By Tax Dragon
17th Aug 2018 07:38

Part 3: it's 5 years since Boris claimed the relief under s154. He is looking to incorporate. Write a letter to Boris explaining what happens to the s154 relief on incorporation.

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By Ruddles
17th Aug 2018 10:11

Someone has been drinking far too much of his namesake.

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