Leases and Licences

spoutwell

I'm reading up on the difference between leases and licences and the 'interest' a licence gives a licencee in property (if any). It would appear that if the licence includes the right to take anything from the land (timber, crops, game, etc.) that the licence is irrevocable. Seems like an easy way to transfer land without incurring stamp duty, capital gains tax, etc.

Wantobe

You need to do some more reading.

Reloc8

spoutwell wrote: »

I'm reading up on the difference between leases and licences and the 'interest' a licence gives a licencee in property (if any). It would appear that if the licence includes the right to take anything from the land (timber, crops, game, etc.) that the licence is irrevocable. Seems like an easy way to transfer land without incurring stamp duty, capital gains tax, etc.

Start from the point of view that you are never transferring land, just an interest in it.

Ask yourself what interest in land a licence is capable of covering.

Return to the question of whether granting a licence is in fact granting an interest akin to ownership (fee simple/long lease say) in land.

spoutwell

Reloc 8

I'm thinking of a 'licence' to farm land. Its got to be worth less than the market value of the land.

nuac

Spoutwell are you saying that the licence is irrevocable until the crop etc or whatever is taken, or irrevocable in perpetuity. Have you come across some decided cases on this?

Creative use of licenses may be taken to be a way around stamp duty obligations. Do not try to outsmart Revenue in any area, especially in stamp duties.

spoutwell

I wondered about the irrevocability thing myself. I'm not sure if the licensee's right or 'interest' would remain from year to year. A crop might be gone but the means of producing another one would still remain.

dermot_sheehan

S. 50 stamp duty consolidation act 1999, licences for less then 35 years treated as leases for stamp duty purposes