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Posted Tue, 05 Dec 2023 14:35:25 GMT by RichG63
Hi I'm a private landlord and do my own self assessment. I am planning to extend the lease on a leasehold maisonette which is currently let. The current lease had approx 78 years left but if extended it could become up to a 990 year lease (exact number of year yet to be confirmed but it will be more than just a 99 year extension). The cost for this I estimate to be approx £2k in fees (valuation & legal) and £5k for the lease. I am confused about what I can claim and also whether it is a business expense or capital cost?
Posted Thu, 07 Dec 2023 10:08:34 GMT by HMRC Admin 25
Hi RichG63,
Thank you for your question.
The normal legal and professional fees incurred on the renewal of a lease are allowable as an expense if the lease is for less than 50 years.
But any proportion of the legal and professional costs that relate to the payment of a premium on the renewal of a lease are not deductible.
If the lease is for over 50 years, the expense then becomes a capital cost.
More information can be found at:
PIM2120 - Deductions: main types of expense: legal and professional costs
Thank you. 
Posted Thu, 07 Dec 2023 10:39:07 GMT by RichG63
That's clears it up perfectly, many thanks.

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