The taxpayer’s acquisition of a flat on a new long lease following a property development project involved a part disposal of a long head lease of the developed property.
The appellant was approached by a developer (CB) to become involved in a development project. The appellant and his son (SW) decided to become involved with the project, which involved: the appellant and SW jointly acquiring a 999-year lease (‘head lease’) over the upper floors and air space of a property for £990,000; the appellant and SW providing funds to CB to undertake the development work; and CB undertaking all of the work.
At the end of the development, the upstairs of the property consisted of four residential flats, each being granted a new long leasehold title under the head lease. Flats 1 and 4 were sold to independent third parties, being long leaseholds of 125 years. Flat 3 was acquired at full market value by one of the
