Discusses the advantages to a tax paying company in the absence ofinflation, to lease commercial property from a nontax payinginstitution. Outlines the reasoning behind the existence of a market inthe sale of short leaseholds to gross funds. Explores the financialadvantages to leaseholds being owned by taxpaying firms when there isprice inflation, but declares the wisdom of selling to gross funds atthe point at which their monetary value starts to decline. Suggests thatthe UK tax system, which does not allow firms to write off the cost ofinvestment in commercial buildings against tax, affects the pattern ofownership of these buildings.
Journal of Valuation – Emerald Publishing
Published: Apr 1, 1990