8.—17b

154

APPENDIX XXXI. Memo, prom Valuer-General re Computation op Lessor's and Lessee's Interests. The following is an example of the computations of the interests of lessor and lessee in respect to a property valued at capital value £4,000, unimproved value £3,000, improvements £1,000, leased for twenty-one years at an annual rental of £140, with a right of renewal for a further term of twentyone years, the rental for the second term to be fixed on valuation. In case (A) the improvements were already on the land at the date of the lease ; in case (B) the improvements have all been effected by the lessee, and the rental is paid on the ground-value only. (C.V. = capital value ; U.V. = unimproved value ; impts. = improvements.) (A.) C.V. U.V. Impts. £ • £ £ 4,000 3,000 1,000 (effected by owner). Lease, twenty-one years, at £140 per annum, with right of renewal on valuation for a further period of twenty-one years. Lessee's interest in capital value = ( 4g- --£140) X 12-821 £769-26. Apportioned between unimproved value and value of improvements. O.V. U.V. £4,000 : 769 : : £3,000 : 576 (lessee's interest in unimproved value). £769 — £576 =? £193 ( ~ improvements). £3,000 —£576 =£2,421 (lessor's interest in unimproved value). £1,000—,£193 = £807 ( „ improvements). O.V. U.V. Impts. £4,000 .. .. Lessor, £2,424 .. .. £807 Lessee, £576 \. . . £193 [or] Lessor's interest in capital value = (140 X 12-821) plus reversion (4,000x0-359) =£1,794-94,. plus £1,436 =£3,231. Apportioned between unimproved value and value of improvements. C.V. U.V. £4,00(1 : £3,231 : : £3,000 : £2.121 (lessor's interest in unimproved value). £3,231 £2,424 = £807 ( „ improvements). £3,000 — £2,42! : £576 (lessee's interest in unimproved value). £1,000- £807 =£193 ( ~ improvements). C.V. U.V. Impts. £4,000 . .. Lessor, £2,121 .. .. £807 Lessee, £576 .. .. £193 (B.) C.V. U.V. hunts. £4,000 .. .. £3,000 .. £1,000 (elected by lessee). Lease, twenty-one years, at £1 10 per annum ground-rent, with right of renewal for a, further term of twenty-one years on valuation. No right to compensation for improvements. Lessee's interest in unimproved value £140) x 12-821 £128-21. Lessee's interest in improvements = (~~ £17-123) £871-15. Lessee's interest in capital value ---,£l2B plus £871 = £999. £3,000 — £128 = £2,872 (lessor's interest in unimproved value). £1,000 £871 =£129 ( „ improvements). C.V. U.V. Impts. £4,000 .. .. Lessor, £2,872 .. .. £129 Lessee, £128 .. .. £871 [or] Lessor's interest in unimproved value = (140 X 12-821) plus reversion (£3,000 x 0-359) = £1,795,, plus £1,077 = £2,872. Lessor's interest in improvements = (£l,OOO X 0-129) — £129. £3,000 — £2,872 = £128 (lessee's interest in unimproved value). £1,000- £129 =£871 ( „ improvements). C.V. U.V. Impts. £4,000 .. .. Lessor, £2,872 .. .. £129 Lessee, £128 .. .. £871