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Where Taxpayers and Advisers Meet

Assured Tenancy

marandind
Posts: 26
Joined: Sat Feb 05, 2011 12:26 pm

Assured Tenancy

Postby marandind » Fri Sep 11, 2015 8:02 am

We live in a house on an assured tenancy, and have done for about 20 years.

The landlords have decided that they would like to redevelop the site, and obviously our position is something of a complication. They have offered us an ex gratia payment to vacate the property which is quite generous, but it obviously replies on the tax position to some degree.

Is a payment of this sort liable for income tax, or is it viewed in a different way?

Many thanks for any help you can offer.

King_Maker
Posts: 6538
Joined: Wed Aug 06, 2008 3:22 pm

Re: Assured Tenancy

Postby King_Maker » Fri Sep 11, 2015 10:50 am

This has come up before recently.

My view - not universally accepted - is that is payment for your surrendering your tenancy. I don't believe it could be categorised as "ex-gratia".

I think it is a capital rather than income receipt, and therefore subject to CGT.

However, I consider PPR exemption should apply - assuming it's always been your main/only residence.

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: Assured Tenancy

Postby section 44 » Fri Sep 11, 2015 12:19 pm

I think it is a capital rather than income receipt, and therefore subject to CGT.
even though it's a short lease?

marandind
Posts: 26
Joined: Sat Feb 05, 2011 12:26 pm

Re: Assured Tenancy

Postby marandind » Fri Sep 11, 2015 1:16 pm

Hi,

Just to clarify this isnt an Assured Shorthold Tenancy, but an Assured Tenancy.

Thanks

King_Maker
Posts: 6538
Joined: Wed Aug 06, 2008 3:22 pm

Re: Assured Tenancy

Postby King_Maker » Fri Sep 11, 2015 3:53 pm

I think it is a capital rather than income receipt, and therefore subject to CGT.
even though it's a short lease?
Yes - IMHO.

AFAIK, this is also HMRC's view - which is unlikely to evoke any disagreement from a tenant receiving such a tax free payment. :)

I think it would apply to a mere Licence also - but the owner/landlord would usually need to be very impatient to make such a payment.


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