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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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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
             
    50        

The consideration to be taken into account for CGT purposes is:

£5,800 + £15,000 = £20,800