Leases: Sch.A: example
Mr K granted a 30 year lease of his holiday cottage to his brother. The rent payable underthe lease was less than a full market rent. Mr K received a premium of £10,000. TheValuation Office Agency considered that the premium which would have been paid if thelease had been granted at arms length was £25,000.
The amount chargeable under Schedule A, see CG70900, is:
|£10,000||-||(£10,000 x 29)||=||£10,000 - £5,800||=||£4,200|
The consideration to be taken into account for CGT purposes is:
£5,800 + £15,000 = £20,800