Lease Premiums

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February 25, 2024 at 8:48 pm #701109
fdxnghd
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Hello,

I have a question about lease premiums.

On 1 October 2022, Sou grante a 25-year lease of a freehold property in return for a premium of £20,000.
What is Sou’s assessable property income for the tax year 2022/23 in respect of this lease premium?

Answer:

(51-25)/50 x 20,000 = £10,400

My doubt:

In which situations should we divide the above computation for the number of years of lease?

Thanks,
Filipa
February 26, 2024 at 5:17 pm #701207
JillyB
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The landlord pays tax in the adjusted premium he received – ie 10,400
The tenant can claim the expense of £10,400 spread over 25 years – the length of the lease
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