My husband and I own a freehold block of seven flats in Manchester, and we would like to sell four. We are in the process of creating leases so we can split titles on all of them, but we are unsure of the tax implications. We realise we will have to pay capital gains tax (CGT), but do we have to pay stamp duty land tax (SDLT)? 

Arthur replies: 

It seems that you are separating the freehold from the leases. The way to do this is by doing a sale and leaseback. You transfer the freehold to 'someone else', who then grants you a lease. See HMRC’s Capital Gains manual at CG70774 (tinyurl.com/hmrc-cg70774), which indicates that it is possible to do a sale and leaseback without any CGT. In addition, if you look at HMRC’s Stamp Duty Land Tax manual at SDLTM16040 (tinyurl.com/hmrc-sdltm16040), it indicates that it is possible to do a sale and leaseback without any SDLT. This applies in particular if the new freeholder grants a very long lease, (e.g., a 999-year lease).