Money made from lease extension payment - what is my tax liaibilty

Mike_22

Hi, I own the freehold on a 2 flat property and one of the flats has asked to do an extension on their lease.  A valuation was done and I have agreed a price with the leaseholder.

I want to find out what tax I would have to pay on the money I'll receive from the leaseholder for the lease extension, I've tried searching online but it's very confusing. 

I own the freehold as it's was part of the other flat I owned so not sure how these things work.

Thank you for any advice.

 

Jeremy535897

It will depend on how long the lease extension was for, and how long the original lease has left to run.