Post-completion steps Flashcards
what are the post-completion steps?
- payment of tax
- registering the lease (if applicable)
what is NPV?
net present value = a way to work out the value of the rent payments over the whole lease in today’s money
what is SDLT charged on?
SDLT (Stamp Duty Land Tax) is charged on:
o Any premium (inc. any VAT) +
o NPV (inc. any VAT)
what is LLT charged on?
LLT (Land Transaction Tax) is charged on:
o Any premium (not inc. any VAT) +
o NPV (inc. any VAT)
what is important to remember about VAT here?
VAT will only be relevant if LL has opted to tax
what is the position regarding registration of the lease and 1st registration of the FH?
registration of a legal lease does not prompt 1st registration of the FH
in other words, a registered lease can exist over unregistered land
when can a lease not be registered?
Lease for 7 years or less cannot be registered
when must a lease be registered?
Lease more than 7 years must be registered to be legal
when registering a lease and the FH is registered, what is the process (inc. timescales) and outcome?
T’s applies to register the lease (Form AP1).
Must be completed within priority period.
HMLR will assign the leasehold title class
LH gets own title + marked on FH title.
when registering a lease and the FH is unregistered, what is the process (inc. timescales) and outcome?
T’s application is for 1st registration.
Must be done within 2m of completion.
HMLR will assign the leasehold title class
LH gets own title (will not be marked against FH title because FH is not registered)
what are the different classes of leasehold title?
absolute
good
possessory
qualified
explain absolute title
free from defects
explain good title
lease sound but FH does not have absolute title or unregistered
explain possessory title
someone is in possession but cannot produce full evidence
explain qualified title
there’s a known defect affecting title (i.e. transpires original lease wasn’t properly executed)
