1. PURCHASE PRICES FOR BV ASSETS
SALE OF RESIDENTIAL FREEHOLD LAND AND BUILDINGS TO THE OCCUPYING TENANTS.
1. When selling any property that has passed to the Crown as bona vacantia we are required to obtain the best price reasonably obtainable. Before proceeding further you are advised to seek your own independent advice from a qualified surveyor as to the cost of acquiring the freehold title from the Crown. You may find that it is cheaper to restore the dissolved company to the register, if that is possible, rather than setting up a new company and buying the freehold title from the Crown.
2. This part of the guidelines deals mainly with sale of the freehold title of residential buildings that are divided into flats, but the general principles also apply to leasehold houses.
3. In some cases where a long lease has been granted for a very low rent section 153 of the Law of Property Act 1925 may provide an alternative method of acquiring the freehold to a property. However, the Treasury Solicitor cannot give legal advice and you should take your own independent legal advice as to whether the section is applicable in your case. If you think that section 153 applies in your case then you do not need to refer the matter to the Treasury Solicitor. However, if you wish to purchase the freehold, we may consider selling the same in accordance with the terms of our guidelines (BVC 6F).
4. There is a minimum price of £1,000. In addition you will also have to pay the Treasury Solicitor’s proper legal costs, plus VAT and disbursements. See below for details as to the amount of costs that we charge.
5. In the case of the sale of a leasehold house where the house is worth less than £250,000, or in the case of flats where the value of each flat in the building is worth less than £250,000 and all the flats are leasehold, with leases having at least 80 years left to run before they expire, the price (subject to contract) is 15 times the total of the annual ground rents (whether or not such rent is actually being paid), or £1,000, whichever is the higher.
6. In all other cases we will have to obtain the advice of the District Valuer on both the price and the most appropriate method of sale. Before we will instruct the District Valuer you must send to us a cheque drawn in favour of “The Treasury Solicitor” in the sum of £500, or your solicitor must provide us with his undertaking to pay our costs of instructing the District Valuer to prepare a valuation.
EXAMPLES USING THE FORMULA
Example 1.
There are 8 flats in a building each worth less than £250,000. The annual ground rent for each flat is £20.
The total annual ground rent is 8 x £20 = £ 160
Fifteen times the total ground rents is 15 x £160 = £2,400
Therefore the purchase price for the freehold title is £2,400
Example 2.
There are four flats in the building each worth less than £250,000. The annual ground rent for each flat is £10.
The total annual ground rent is 4 x £10 = £ 40
Fifteen times the total ground rents is 15 X £40 = £600
Therefore the purchase price for the freehold title is £1,000 (i.e. the minimum price for any bona vacantia asset).
If you wish to proceed with the purchase, please refer to guidelines BVC 6F for more details, and forward to us the documentation requested in those guidelines.
SALE OF RESIDENTIAL HEAD LEASEHOLD LAND AND BUILDINGS TO THE OCCUPYING TENANTS.
1. This part of the Guidelines deals with the sale of the head leasehold title of residential houses and buildings that are divided into flats. The same general principles as set out above regarding the sale of the freehold title apply, but with the following variations concerning the calculation of the purchase price using the formula.
2. In the case of the sale of houses worth less than £250,000, or in the case of flats where the value of each flat in the building is worth less than £250,000 and all the flats are leasehold, with leases having at least 80 years to run before they expire, the price (subject to contract) is 15 times the difference between the total amount of rent payable by the tenants under the terms of their under leases LESS the amount of the rent payable to the freeholder under the terms of the head lease (whether or not such rents are actually being paid), or £1,000, whichever is the higher.
EXAMPLES USING THE FORMULA
Example 1.
There are 8 flats in the building each worth less than £250,000. The annual ground rent for each flat is £20. The head rent payable to the freeholder is £20.
The total annual ground rent is 8 x £20 = £160
Less the rent payable to the freeholder £20
Difference = £140
Fifteen times the difference is 15 x £140 = £2,100
Therefore the purchase price for the head lease title is £2,100
Example 2.
As above, except that the head rent is £120.
The total annual ground rent is 8 x £20 = £160
Less the rent payable to the freeholder £120
Difference = £40
Fifteen times the difference is 15 x £40 = £600
Therefore the purchase price for the head lease title is £1,000 (i.e. the minimum price for any bona vacantia asset).
If you wish to proceed with the purchase, please refer to our guidelines BVC 6L for more details, and forward the documentation requested in those guidelines.
SALE OF VACANT AND COMMERCIAL LAND AND BUILDINGS, AND ALL OTHER LEASEHOLD PROPERTY.
1. We will usually follow the District Valuer’s advice as to the best price reasonably obtainable and most appropriate method of sale to achieve that price. The District Valuer may advise us that in order to achieve the best price the property should be sold by auction, or tender, or offered for sale on the open market through estate agents. The District Valuer may also recommend that all the adjoining owners, and/or the local authority, should be approached to find out if they have any interest in acquiring the property.
2. If the District Valuer recommends a sale based upon the property’s current use value, any offer may then include a covenant restricting the future use of the property, and prohibiting any future development of the property by the purchaser. Alternatively, we may require a covenant from the purchaser to pay a further sum of money representing the enhanced value of the property if planning permission is granted in the future.
3. If the District Valuer advises us that the property is onerous, or is worth less than £1,000, or we are of the opinion that the costs of dealing with the property are likely to exceed its value, we may decide to disclaim the property. For more information on the subject of disclaimer please see our guidelines BVC 7 relating to disclaiming property that has passed to the Crown as bona vacantia.
4. There is a minimum price of £1,000. In addition the purchaser will have to pay the Treasury Solicitor’s proper legal costs, plus VAT and disbursements. See below for details as to the amount that we charge.
5. If you wish to proceed, please refer to the Guidelines BVC 5 for more details, and forward the documentation requested in those guidelines. Please note however that at this stage there is no certainty that we will offer to sell the property to you, or to you alone, or to or to anyone else.
SALE OF INTELLECTUAL PROPERTY AND RIGHTS
1. When selling any property or rights that have passed to the Crown as bona Vacantia we are required to obtain the best price reasonably obtainable. We may therefore decide to take professional advice where available on both the price and the most appropriate method of sale. At this stage there is therefore no certainty that we will offer to sell the IP rights to you, or to you alone, or to anyone else.
2. Rather than agreeing to an outright sale, we may decide to licence the use of the IP rights for the payment of a royalty. Alternatively, if we do agree to a sale, we may require a covenant from the purchaser to pay us a percentage of any profits that are realised by the purchaser’s exploitation of the IP rights.
3. There is a minimum price of £1,000 for all IP rights. For European Community Trade Marks the minimum price is £2,000. In addition, the purchaser will also have to pay the Treasury Solicitor’s proper legal costs, plus VAT and disbursements. See below for details as to the amount of costs that we charge.
4. If you wish to proceed, please refer to our guidelines BVC 11, BVC 12 or BVC 13 for more details, and forward the documentation requested in those guidelines.
SALE OF SHARES.
1. If the dissolved company owned shares in a company that is quoted on the Stock Exchange, the shares will usually be sold in the normal way on the open market by our stockbrokers.
2. If the dissolved company owned shares in a private unquoted company, or shares that cannot for whatever reason be sold on the open market, our usual practice is to offer those shares to the former members of the dissolved company, or back to the company that issued the shares.
3. We must however ensure that we obtain the best price reasonably obtainable for the shares. We will therefore have to take advice from the Revenue and Customs Capital Taxes Office on the value of the shareholding.
4. There is a minimum price of £1,000. In addition, the purchaser will have to pay the Treasury Solicitor’s proper legal costs, plus VAT and disbursements.
5. If you wish to proceed, please refer to guidelines BVC 4 for more details, and forward the documentation requested in those guidelines. Please note however that there is no certainty that we will offer to sell the shares to you, or to you alone, or to anyone else.
2. THE TREASURY SOLICITORS LEGAL COSTS AND DISBURSEMENTS
1. The general rule is that in the case of a sale of any asset, or when we are asked to make a discretionary payment, or if a company is restored to the register, we will charge for all of the work that we have done on the case, together with any disbursements. VAT is payable on our costs and disbursements.
2. For certain types of routine work we may apply a fixed charge for the work done. A list of the type of cases where we have a fixed charge is set out in the attached Table of Fixed Charges. However, we reserve the right to depart from the fixed charge at any time without notice and to charge the costs actually incurred in dealing with the matter, if in our opinion the amount of work exceeds the fixed charge.
3. Whenever an offer is made to sell or deal with any property or rights that have vested in the Crown as bona Vacantia, we will either require those costs to be paid first, or we will require an undertaking from the purchaser’s or the applicant’s solicitors to pay those costs whether or not the matter proceeds to completion.
TABLE OF FIXED CHARGES
|
Type of case |
Fixed charge (£) |
|
Discretionary Grant |
200 (no Vat) |
|
Sale of land and buildings |
500 (plus Vat) |
|
Sale of shares and intellectual property rights |
300 (plus Vat) |
|
Release of Charges and Mortgages |
300 (plus Vat) |