HELP PLEASE! Lease extension and CGT tax - hit a brick wall.

[helpplease1]

Im really hoping that someone can help me here...
I am 1 of 5 freeholders of a 7 flat property. 5 flats are freehold and 2 are leashold. The 5 freeholders are also directors of the freehold company that manages the property.
Recently one of the leasholders extended their lease from from 38 years to 90 at a cost of £50,000. They then sold their flat from 320,000.
I am now trying to work out how much tax our freehold company has to pay for the lease extension earnings before they can be distributed as dividends.
Unfortunately all freeholders are not on good terms and no one is helping to find a solution to this, and i fear it wont get settled in time for the end of our tax year.
There is no way to find out what was originally paid for the freehold when the company was formed in the 70s, none of the existing freeholders were living in the property at that time and the paperwork has been lost. So with this in mind, how do we move forwards?
Seeing as we dont know how much was originally paid, all the complex formulas to calculate the tax that i have found online seem redundant, as i dont have all the data needed to input.
So in this case are we in the unfortunate position of needing to pay CGT on the full £50,000? Ultimately we dont mind doing this if thats what has to happen, but no one can seem to clarify for us - our accountant is completely stumped.
Many thanks in advance for you advise!

[Chanmuganathan]

7 flats – 7 leasehold
Thinking of general structure of share of freehold, there are must be 7 leaseholders, even though you are owning the freehold you must be a leaseholder too.

When the freehold company formed it has acquired the freehold land only, not any leasehold, therefore I assumed there is no base costs for lease premium.

However, the treatment would be different if you sold the freehold to leaseholder as this would be a Capital gain for its shareholders NOT the Company.

[helpplease1]

Hi there Chanmuganathan - yes you are correct, there are 7 flats, so 7 leaseholders. But only 5 of us own the freehold.
So in your opinion its not a capitol gain? Thats interesting as we have been advised differently, which is leading me to be quite confused!

[bd6759]

Hi there Chanmuganathan - yes you are correct, there are 7 flats, so 7 leaseholders. But only 5 of us own the freehold.
So in your opinion its not a capitol gain? Thats interesting as we have been advised differently, which is leading me to be quite confused!

Just to clarify...
Dio you mean that the company owns the freehold, and five of you own the company?

[Chanmuganathan]

Hi

The transaction is subject to corporation tax (chargeable gain) similar to the ground rent and the company extends the terms of the leases then the value of the freehold will reduce. The company has therefore made a part disposal so the part disposal formula A/A + B will come into play, where A is the value of the part disposed of and B is the value of the part remaining. A professional valuation will be needed.

Disposal do not affect the shareholders (5 of you) personal tax circumstances unless the company made distribution.