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SDLT on lease extensions

Ltd Co owned by leaseholders - leases being extended - is SDLT payable?

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One company - two flats - two leaseholders who are the shareholders - 66% and 33%.

Leases have 80 or so years to run. Indviduals want leases extended.

Solicitor is warning of possible SDLT liability.

Is SDLT payable?

Replies (13)

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By Accountant A
23rd Jan 2020 18:19

Have you tried typing "SDLT on lease extensions" into Google? I have.

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Replying to Accountant A:
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By Comptable
23rd Jan 2020 18:49

Yes I have and I have read the HMRC stuff on the subject and my view is that for a variety of reasons no SDLT is payable in these circumstances.
But as I said in the question the solicitor is warning that it could be chargeable and for this reason I posted the question here.
You say you have googled it but you do not say what your view is.

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Replying to Comptable:
RLI
By lionofludesch
23rd Jan 2020 19:00

"Could be chargeable"?

He doesn't know.

What are his doubts? What information does he need to make up his mind?

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By Justin Bryant
23rd Jan 2020 19:08

If the company isn't paid MV for the lease extensions then that will be a distribution potentially and subject to IT on the members and assuming MV is paid then (ignoring CT) SDLT potentially applies accordingly - although there is potential planning re this.

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Replying to Justin Bryant:
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By Comptable
24th Jan 2020 09:26

Thanks Justin
Are you able to point me in the direction of the potential planning?

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Replying to Comptable:
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By Justin Bryant
24th Jan 2020 09:57

It is something you'd have to pay for and I could advise you on this if you like.

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By Tax Dragon
24th Jan 2020 06:35

The 67/33 split is telling.

The solicitor (and Justin) are right.

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By The Dullard
24th Jan 2020 10:21

Are you saying that the company is the freeholder? How did the company come by the freehold?

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Replying to The Dullard:
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By Comptable
24th Jan 2020 17:41

The company bought the freehold.

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Replying to Comptable:
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By The Dullard
24th Jan 2020 17:55

How did the company come to buy the freehold? Did it arise under the collective enfranchisement provisions?...

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Replying to The Dullard:
RLI
By lionofludesch
24th Jan 2020 18:12

I can see a circular conversation developing here.

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Replying to The Dullard:
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By Comptable
24th Jan 2020 18:04

The company bought the freehold.

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Replying to Comptable:
RLI
By lionofludesch
24th Jan 2020 18:15
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