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Lucky receipt?
Twenty years ago our client (a sole trader) took on a full repairing lease of office premises. No premium was paid. With 19 years expired and only one year remaining of the lease, our client was approached by the landlord who asked him to surrender the lease and move out before its expiry. Then, with only nine months remaining on the lease, our client surrendered it to the landlord and moved out.
Lucky receipt?
Twenty years ago our client (a sole trader) took on a full repairing lease of office premises. No premium was paid. With 19 years expired and only one year remaining of the lease, our client was approached by the landlord who asked him to surrender the lease and move out before its expiry. Then, with only nine months remaining on the lease, our client surrendered it to the landlord and moved out.
Under the agreement for the surrender, the landlord waived his rights under the lease as regards rent and services for the remaining nine months, but of particular value was the right to dilapidations at expiry. In addition, the landlord paid our client £12,500. There is no paperwork to indicate the precise nature of that sum, which was simply paid to our client's solicitors by cheque.
Readers' views on the taxation status of this receipt would be much appreciated.
(Query T16,504)
