|
Leases - shorter these days |
|
|
A decade or so ago, it was standard for commercial leases to be granted
for terms of 20-25 years, with five-yearly rent reviews, and with T having
no right to terminate before expiry of the lease term. But, things have
changed markedly. One of the main catalysts for change has been the
introduction of SDLT, which now makes it much more tax-efficient to
have a short lease with an option to renew, rather than a long lease with
a break clause. For instance, a lease at £100,000pa for 20 years will
have SDLT of £15,199; a ten-year lease, with an option to renew for a
further period of ten years, will pay only £8,272. So, those advising Ts
should usually think in terms of a short lease with an option (rather than
a long lease with a break).
|
|
January 2008 |
