Share this content

Statutory leasehold enfranchisement - nominee co?

Where a company is formed to purchase the freehold how can I tell if if it is a nominee arrangement?

Didn't find your answer?

I am looking at a company which has purchased the freehold under statutory leasehold enfranchisement. Most of the leaseholders participated, with ground rents being received from the remaining few. Service charge etc is dealt with separately. With this arrangement does the company always purchase the freehold in a nominee arrangement for the leaseholders? Or can the beneficial ownership be with the company? Is there a way of telling, as the director does not seem sure is the case? Would I be correct in assuming if the company has purchased on trust for the leaseholders they can submit dormant accounts, with ground rents being addressable on the individuals? Thank you.

Replies (7)

Please login or register to join the discussion.

avatar
By The Dullard
19th Sep 2021 19:03

If it's under the 1993 Act, the company is a nominee, because the Act says so. Other acts are more ambiguous, but 99% of accountants probably treat the company as beneficial owner whatever the circumstances.

Thanks (1)
Replying to The Dullard:
avatar
By Grey23
19th Sep 2021 20:13

Thanks TheDullard for this, very helpful.
I am probably being obtuse, but it is under the 1993 Act. Would it follow that we should treat the company as having the legal but not beneficial ownership (or am I misunderstanding the term nominee)?

Thanks (0)
Replying to Grey23:
avatar
By The Dullard
19th Sep 2021 21:01

Yes. Nominee = bare trustee, so that's what I'd do.

Thanks (1)
avatar
By Paul Crowley
20th Sep 2021 09:13

Consider also the future
How to deal with someone wanting to extend their lease who is not part of the existing purchase

Thanks (0)
Replying to Paul Crowley:
avatar
By Grey23
21st Sep 2021 12:58

Thanks Paul . What is the treatment where treated as bare trustee and a lease is extended to a leaseholder who is not going to be be a shareholder - capital gain on the individuals who were part of the original purchase?

Thanks.

Thanks (0)
avatar
By Justin Bryant
21st Sep 2021 13:50

https://www.legislation.gov.uk/ukpga/1993/28/section/15

Presumably such a nominee bare trust arrangement is exempt from TRS, since it's a trust that "results from a legislative requirement rather than from the intention of the settlor or is merely incidental to a legitimate wider commercial transaction." per section 7.6 here:

https://assets.publishing.service.gov.uk/media/5f0dec47d3bf7f03a1c56731/...

Thanks (0)
Replying to Justin Bryant:
avatar
By The Dullard
21st Sep 2021 16:44

This is the link you want Justin. See para 1.

https://www.legislation.gov.uk/uksi/2017/692/schedule/3A

Thanks (0)
Share this content