Commentary

B5.232 Ascertainment of the cost of a ground rent

Business tax
Business tax | Commentary

B5.232 Ascertainment of the cost of a ground rent

Business tax | Commentary

B5.232 Ascertainment of the cost of a ground rent

In John Emery & Sons v IRC1 the Special Commissioners directed that the formula for ascertaining the expenses attributable to the ground annual should be as follows—

where:

  1.  

         A is total expenses (including cost of the land and development, legal costs etc),

  2.  

         B is the market value of the reversion at the time of the grant of the lease, and

  3.  

         C is the consideration for the grant of the lease.

The Special Commissioners were proceeding on the basis that the realisable value of the ground annual should not be brought

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