In order to quantify the Case I profit relating to the purchase
and sale of the freehold, you must establish the market value of
the tenancy at the time the freehold was acquired.
The tenancy is then treated as if it were appropriated from
fixed assets to trading stock thereby invoking TCGA92/S161 (Bath
and West Counties Property Trust Ltd v Thomas [1977] 52TC36).
This market value constitutes the 'consideration' on which
the capital gain is computed.
It also constitutes a deduction in the computation of the
Case I profit.
