19 Browns Shop

Mrs. Brown is a sole trader. She acquired a freehold shop for use in the business in May 2005 for £40,000 and sold it in August 2013 for £80,000. Mrs. Brown is considering buying a new shop. She has located two possible shops. One is a small freehold shop which would cost £72,000. The other is a larger leasehold shop with a lease of 55 years. The cost of the lease would be £90,000.

Required

Explain the tax consequences of acquiring each of the shops