Tax and Lease extensions

A lot of people think that when they have purchased their freehold to their block that is the end of the story and that they do not need to do anything else to protect their position.  However, that is not always quite right as this article explains. There may be a ‘sting in the tail’ if you delay extending your leases to 999 years having bought out the freehold as this article by Mark Chick explains: Tax and lease extensions 19 October 2015

If there is a big jump in value between what was paid for the notional ‘share of freehold’ and the actual value of the lease extension that is received, there could be adverse capital gains tax consequences for the freehold owning company. There may be ways of structuring post completion lease extensions to reduce this effect.

If you would like to discuss extending your lease, or any the tax issues that may arise from an enfranchisement or property related issue please email or telephone 020 7631 4141 and ask to speak to Philip Vickery.

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