Commentary

B5.229 Sales and creation of ground rents

Business tax
Business tax | Commentary

B5.229 Sales and creation of ground rents

Business tax | Commentary

B5.229 Sales and creation of ground rents

The practice of disposing of houses to purchasers in consideration of a lump sum and the right to payments in the nature of rent has been considered in a number of cases. The problems raised by these cases are:

  1.  

    (a)     whether the value of the asset retained by the seller comes into the tax computation; and

  2.  

    (b)     if it does not, what proportion of the total expenses should be excluded.

It will be seen that the answer to problem (b) depends on whether the seller has retained the freehold interest in the land1. The

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