David Slade Archive

Break clause conditions need to be considered carefully

Several recent cases emphasise the need for the utmost care when exercising a lease break option. It is difficult for a landlord in the current climate to achieve the onerous conditions he used to be able to achieve - such as compliance with lease covenants – in lease break clauses. Tenants have a good bargaining power in break clause negotiation, under current market conditions. A tenant signing up to, say, a six year lease with a break option after three years no doubt expects to have the right to walk away after the third year, if serving notice, without having to surmount obstacles before doing so.

TOGC relief on investment purchases

Transfers of businesses as going concerns (TOGCs) qualify for TOGC relief if certain conditions are met. If a transaction qualifies for TOGC relief, it is taken outside the scope of VAT so that no VAT is payable. A sale of an investment property is prima facie a TOGC because HMRC sees the act of letting the property and generating income from the rents on the property as being a business carried on from the property.
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