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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Here is the guidance from the Wealth Protection Report [UK and International Tax Planning]:
'The tax legislation distinguishes between capital and income treatment by looking at the length of the lease term. A premium paid for a very long lease is clearly a capital sum, as this is treated as a part disposal of the underlying freehold interest. In this case there would be a charge to capital gains tax.'
The premiums must thus be declared as a capital gain. Unfortunately taper relief has long gone, but you do have a non cumulative Annual Exempt Amount (AEA) of 11.3K to offset any gain.
If you spread the gain over several tax years you can claim AEA for each computation.
I am rather surprised at the rating given.
it doesn't. If you make a gain in a year it is taxed in that year. To minimise CGT you must arrange transactions to stagger tax years, but this may not be possible.
Thank you for your support.,
Delighted to have been of assistance.