I'm going to incur £8k to extend my lease. Originally I thought this would only have a capital gains impact, but as it reduced my ground rent (whcih is a cost against income), can I offset a proportion of the costs against rental income ?
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A lease is capital in nature and do not believe that a portion can migrate in the revenue column. Regards Peter -
Natch Pete!
A lease premium may be deductible in all sorts of ways - though I doubt it will be of help to OP as he probably doesn't have a trading business nor use it to run his rental business from.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM46255.htm
http://www.hmrc.gov.uk/manuals/pimmanual/PIM2330.htmComment
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Also, a premium for a lease of 50yrs. or less is (I recall) treated as L's income.JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
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2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
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4. *- Contact info: click on my name (blue-highlight link).Comment
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PARTLYOriginally posted by jeffrey View Posthttp://www.hmrc.gov.uk/manuals/pimmanual/PIM1205.htmas L's income.Comment
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Tax treatment - lease extension
What is not widely known is that for those granting lease extensions if they are granted strictly pursuant to the terms of the 1993 Act the grantor is allowed to "roll over" the premium and defer the tax liability on the premium provided the proceeds are reinvested in "land" either twelve months before the premium is received or up to three years later.Comment
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Indeed, under the compulsory purchase legislation.
http://www.hmrc.gov.uk/manuals/CG4manual/cg61900.htmComment
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