Hi there. I live in a Victorian property which has been divided into 5 flats.
Several years ago, three of the flat owners (including myself) purchased the freehold. The two remaining flat owners decided that they would not participate in the freehold purchase.
A company was formed for the three freeholders. This company collects ground rent from the two leaseholders who are not freeholders. We submit accounts to companies house on an annual basis etc.
Recently one of the two leaseholders (who are not freeholders) decided that they wanted to extend their lease. The original lease was for 99 years. The remaining term on their original lease was 66 years.
The lease extension was granted for 999 years at a peppercorn rent. A new lease was drafted under the same terms as before (apart from the 999 years/peppercorn rent etc).
The leaseholder paid a substantial premium to the freehold company for granting the lease extension.
Before we divide the premium between the three freeholders, my question is - are we (as the freehold company or as individuals) liable for any tax on this premium that was paid?
I would be very grateful for any assistance.
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