CGT on Leasehold sale

[Nevu]

I live in a house converted into two maisonetes and am the freeholder of the entire property. The person above wishes to extend their lease which I am happy to do. Does this mean I am liable for CGT on the sale of the lease extension?
The rules are hard for me to follow on the Gov site.
Thanks

[quarterday]

Provided the extension is done on the statutory s56 basis, so that the lessees get an extra 90 years and the ground rent is expunged, and the lease extension deed contains a declaration to such effect, there is a little known but valuable tax concession whereby the CGT liability can be deferred, effectively indefinitely just so long as the premium you receive is reinvested in an interest in "land" either one year before receipt of the premium or up to three years afterwards.

I have a feeling that the qualifying "land" excludes your own dwelling which of course, for the moment at least is an exempt asset so far as CGT is concerned.


This concession mirrors the provisions relating to deferral of CGT upon disposal arising as a result of Compulsory Purchase of land; which of course is exactly what it is.


If it doesn't suit you to reinvest the proceeds in "land", then the premium is going to be treated as a taxable gain and you will liable to cough up!

I shall therefore look out for you bidding for some comparatively low value lot at the Auction rooms!!

[Nevu]

Thanks for your reply, this is very helpful.

I have also picked up from this interesting forum that Private residence relief might be a consideration in immunity from taxable gain as I actually live in the building as the freeholder. Although it is difficult to find an example that reflects my own.

[Telometer]

It seems unlikely that you would get PPR relief in respect of a transaction relating to a property in which you have never lived.