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31 March 2009
Three clients form a limited company to acquire the freehold of a property in which they each lease a flat. The company then grants leases to the clients. What are the stamp duty land tax and other implications?
Our clients A B and C formed a limited company to facilitate a leasehold enfranchisement of their three flats in a property.
The three clients each loaned the company £1 million to enable it to acquire the freehold interest.
Immediately after the acquisition of the freehold the company granted three 999-year leases to A B and C.
The leases do not mention any premium and refer to consideration of only ‘the respective rents and the covenants hereinafter reserved and contained’. The annual rent is a peppercorn (if demanded).
I am a little confused as to the implications of these transactions and should be grateful if Taxation readers could please clarify the following points.
- Whether there are four stamp duty occasions here or whether there is some statutory or concessionary relief.
- Whether there is any possibility that the company could...
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