I own a buy-to-let property (actually my former home; I now live in Australia so am non-UK resident). We have potential new tenants who want a corporate let. The suggestion is a two year lease with a break clause at 18 months and 18 months rent up front, the remainder to be paid after eighteen months if the break clause is not invoked.
Is this within the lease premium rules (as it is a two year lease)? Or does the fact that there is a break clause and only eighteen months rent is payable up front mean the lease is considered to be eighteen months for lease premium purposes? Or is it not a lease premium situation as in reality there is just rent being paid in advance? My concern is that if it is a lease premium situation the upfront rent would be taxable in full in the year of receipt which would mean tax being paid at a higher rate than if it was taxed on the accruals basis.
Also the tenants have said "As a Corporate let the company also would like to avail itself of the various tax breaks available to Corporate lets in the UK and therefore will be paying the first 18 month of the rent in advance". What are these tax breaks?
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