Creation of Leaseholds From a Freehold

My mother and myself own (outright, no mortgage or outstanding loans) a freehold building comprising of two flats. Each of us own 50% of this freehold. The top flat has 3 bedrooms and the bottom two bedrooms, and a garage. The flats have just been valued at the same amount. The properties have not been used for business purposes only residential. We are looking at creating leaseholds for each flat with myself and my Mother having one leashold flat each. Does the creation of leaseholds out of a freehold, under these circumstances, create a CGT liability?

Hi,

Please refer to:

HS292 Capital Gains Tax, land and leases (2023)

Thank you.

Thanks, but was hoping for a bit of explanation rather than just being pointed at the guidance. Having read the guidance referred to, it talks about having receive a premium for the leases and so I don't think is appropriate in this case. No premium has been received, it is just a change in the type of ownership from freehold to leasehold. with the same values held before as after. Logically, as there has been no gain no CGT would apply. However, I have been advised that technically, there is a CGT liability, but this can be mitigated by relief? Please can someone advise.

Hi Steve L

We can only provide general information/guidance in this forum.  
For an answer to a question of this nature, you would need to contact our self assesment helpline on 0300 200 3310, contact our webchat facility at Contact HMRC or seek professional advice.

Thank you

Thanks, I did try phoning a while back. The agent said that he could not answer my question and that he would have to refer me to someone technical, but nobody was available, so requested callback, but nobody phoned (have checked through phone logs etc). Can't find access to Webchat from the 'Contact HMRC' pages, it just says to call or write in. Understand that it can take a long time to get a response from writing in? Hence decided to use this method. Can you provide me with a link to web chat? Thanks.

Hi Steve L

This is at Self Assessment: general enquiries and select the option Ask HMRC Online.

Thank you