CGT - Grants of Leases

Question 1

Granting a Long Lease

The Gain Arising is Calculated as:

Answer 1

A/(A + B) x Acquisition Cost

B = Revisionary Interest (Value of Remainder)

A = Gross Premium

Part-Disposal Rules.

Question 2

Granting a Short Lease

The Capital Element of The Premium is Calculated as:

Answer 2

2% x (N - 1) x P

P = Premium
N = Number of Years on The Lease