hi Leywood - our enfranchisement solicitor has already done it all for us and its not DIY. - tomorrow I will ask about the basis for not paying the SDLT for the individual leases and will update this forum. Thank you all for your comments / thoughts - its much appreciated
hi Dragon - the purchase of the freehold attracted stamp duty but for the individual lease extensions the enfranchisement solicitor executed without stamp duty to pay (the existing leases are over 100 years remaining; the extension makes them 1000 years - so its not a significant value per flat) ....maybe im over thinking it but my thoughts were by waiving the ground rent payable the freehold asset we have just bought is now worth less - and i had just been thinking of writing the asset value down (but several of the replies suggested its best to look at it as a disposal) but any guidance would be much appreciated
thanks Paul - im with you and the scenario is as you describe first as we all have £1 shares at £1 each and we were told to do it as close to the freehold purchase date as we can realistically do so values are the same. So basically the P&L is flat (transactions at arms length values) and the fixed asset is lowered and the loan liabilities to shareholders reduced - perfect thanks
hi there - I see this is quite an old thread so not sure if i should add to it but will see if it get any responses.
As leaseholders to a block of flats we set up a company to hold the newly acquired freehold title last year. This was recorded at cost. Recently we extended all the leases to 999 years and made ground rent peppercorn. My guess is this gives a permanent diminution in value of the freehold fixed asset to almost nil.
My answers
hi Leywood - our enfranchisement solicitor has already done it all for us and its not DIY. - tomorrow I will ask about the basis for not paying the SDLT for the individual leases and will update this forum. Thank you all for your comments / thoughts - its much appreciated
hi Dragon - the purchase of the freehold attracted stamp duty but for the individual lease extensions the enfranchisement solicitor executed without stamp duty to pay (the existing leases are over 100 years remaining; the extension makes them 1000 years - so its not a significant value per flat) ....maybe im over thinking it but my thoughts were by waiving the ground rent payable the freehold asset we have just bought is now worth less - and i had just been thinking of writing the asset value down (but several of the replies suggested its best to look at it as a disposal) but any guidance would be much appreciated
thanks Paul - im with you and the scenario is as you describe first as we all have £1 shares at £1 each and we were told to do it as close to the freehold purchase date as we can realistically do so values are the same. So basically the P&L is flat (transactions at arms length values) and the fixed asset is lowered and the loan liabilities to shareholders reduced - perfect thanks
hi there - I see this is quite an old thread so not sure if i should add to it but will see if it get any responses.
As leaseholders to a block of flats we set up a company to hold the newly acquired freehold title last year. This was recorded at cost. Recently we extended all the leases to 999 years and made ground rent peppercorn. My guess is this gives a permanent diminution in value of the freehold fixed asset to almost nil.
Does the charge go to a revaluation reserve ?