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A client and his mother owned the freehold of a small block of flats and the client inherited his mother’s share on her death. He has a long lease on one of the flats, which is his main residence
My client owned the freehold interest in a small block of flats jointly with his mother until her death when he inherited her interest under the terms of her will. During the period of ownership my client lived in one of the flats rent-free subject to a long lease in my client’s name.
By way of a deed of variation the interest of my client’s mother has passed to his children to mitigate inheritance tax. My client now wishes to surrender the long lease and replace it with a short lease because he wishes to continue occupying the flat.
Surrendering the long lease should add about 50% to the freehold values of the property which will pass to the children and reduce my client’s potential inheritance tax.
My client intends to pay a market rent under the short lease. I would be grateful for readers’ advice on...
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