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Inheriting Flat - Extending Lease

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  • AnotherJoe
    AnotherJoe Posts: 19,622
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    foxy-stoat wrote: »
    I thought it sounded dear, bearing in mind the flat is only worth £50,000.

    You would be open for capital gain tax as you will almost certainly add value by spending £4,000 - better for the Executors to sell it and pay you the cash if you can.


    Presumably its only worth 50k because it has such a short lease.
  • Robot27
    Robot27 Posts: 30
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    @Tom99 & @AnotherJoe ... looking at my notes from the phonecall I had, There was a £90 admin fee and yes, £3-4k for the cost of extending the lease. (I will double check this with the lady)

    @G_M ... that's the formal valuation of probate and an estate agents valuation. The valuation was based upon an incorrect estimate of 100 years on the lease.

    @foxy-stoat ... I didn't take into account any Capital Gain Tax. I believe the initial valuation of £50,000 was based upon a healthy length of lease. It's only recently we have found there's only 43 years left.

    To all ... just to recap, we are not through probate yet, so these are just early things I am finding out of which I will be discussing with the executor and his solicitor. Just trying to get one step ahead so there are no nasty surprises. Obviously I have to respect the duties and decisions the executor will have to make.

    Nothing's easy and straight forward and I know there will always be costs that I havent accounted for :( ... thank you for making me aware, even if they are not things I want to hear.
  • AdrianC
    AdrianC Posts: 42,189
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    43yr lease is so short the statutory calculator won't do it.

    https://www.lease-advice.org/calculator/

    BUT - for a £50k-with-long-lease property with 50yrs left as of the start of July and peppercorn ground rent ... £10k is the estimated cost, including marriage value.

    So - the question has to be what the lease extension is like... Because you can bet it won't be that much cheaper than statutory unless there's some serious drawbacks. Ground rent?
  • Robot27
    Robot27 Posts: 30
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    @AdrianC ... Just checking my notes. There are two important clauses which are included within the proposed 125 year extension:-

    - Ground rent of £150 per year has to be paid by any owner;

    - this doubles every 25 years

    Apologies to all for not making this clear from the start of the thread.

    Just to mention that £50,000 is the going rate for this sort of one bedroom 1950s flat here in the North East of England.
  • Tom99
    Tom99 Posts: 5,371
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    This calculator copes with 43yrs:
    https://www.freeholdcalculator.com/leasehold_extension.php
    c £12,000 plus cost
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