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Where Taxpayers and Advisers Meet

HMRC Capital gains worksheet : Lease extension

landlord1234
Posts:85
Joined:Sat Nov 26, 2011 3:39 pm
HMRC Capital gains worksheet : Lease extension

Postby landlord1234 » Sun Nov 15, 2020 5:59 pm

Hi,
When using the HMRC SA Capital gains worksheet for a residential property sale.

Which category does the cost of a lease extension go into ?

Is it added to the cost of acquisition , improvements, or Deduction, if any, in respect of reliefs and elections ?

Thanks

someone
Posts:692
Joined:Mon Feb 13, 2017 10:09 am

Re: HMRC Capital gains worksheet : Lease extension

Postby someone » Tue Nov 17, 2020 4:08 pm

Hi,
When using the HMRC SA Capital gains worksheet for a residential property sale.

Which category does the cost of a lease extension go into ?

Is it added to the cost of acquisition , improvements, or Deduction, if any, in respect of reliefs and elections ?

Thanks
I would assume it's a capital improvement. But that assumes you elected to (and were able to) apply ESC D39 at the time of the extension. Otherwise the long lease value at the time of the extension should be used as the base cost and the lease extension cost is moot (and the period of ownership runs from then too if there are PPR calculations involved)

Assuming you were able to, then I'd presume that not reporting the disposal of the old lease at the time would implicitly mean that you'd applied ESC D39 a t the time of the extension.


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