Reliefs and exemptions: Sale and leaseback arrangements: Example 2
Company A owns a leasehold interest in a commercial property, to raise finance it decides to assign its lease to an unconnected company B in consideration of £1m and a leaseback at market rent of the ground floor only.
Section 57A applies as the transfer by A is in consideration of the leaseback by B of part of the property transferred so is an interest granted out of the interest acquired. The only other consideration for the transaction is the payment of money, there is no section 45 or 45A transaction and the companies are not connected for group relief purposes, so relief will be available on the leaseback. The assignment is chargeable on the market value in accordance with section 47; no account will be taken of any consideration actually passing in these circumstances.