Lease dilemma when securing a B2L mortgage?

pic of man with a dilemma about a b2l mortgage for a leasehold property property118

12:06 AM, 5th July 2023, 3 years ago 3

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Landlord News Lettings & Management

Hello, My company owns the freehold of a property which is divided into 2 self-contained flats, one of which is sold on a long lease and the other let on an AST.

We are looking to secure a B2L mortgage but the lender requires that the AST flat is held on a long lease.

That might seem easily done but a freeholder cannot grant a lease to itself and granting a lease to a third party (shareholder, director or other?) would raise the issue of CGT and SDLT.

Has anyone had a similar experience?

Thank you,

Stuart

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Tags: a b2l mortgage on a leasehold prrty, ast flat on a long lease, landlord uk

Comments

Simon F

Member Since October 2020 - Comments: 198

10:29 PM, 5th July 2023, About 3 years ago

Lease granted to a wholly owned subsidiary company, perhaps?

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Crossed_Swords

Member Since April 2021 - Comments: 189

9:07 AM, 7th July 2023, About 3 years ago

You need a tax accountant

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Speed Jive

Member Since July 2023 - Comments: 1

8:17 PM, 10th July 2023, About 3 years ago

1. Freeholder enters into contract with director/subsidiary to sell freehold for £10
2. Sale is subject to the grant of a 999 year lease back to the seller.
3. BTL becomes the leaseholder.
4. Freehold is in separate ownership
5. Should be tax neutral but take accountants advice

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