Lease Extension - "Marriage Value"

The topic of lease extension comes up quite often. The BBC explain why you should not let the remaining time on your lease drop below 80 years:

When the agreement is extended, the leaseholder pays a premium for the extra years, like any rental payment. They will probably also part with a lump sum to pay off the ground rent. And most people try to do this before 80 years are left.

This is because extensions for a flat with fewer than 80 years remaining will attract a third payment, called marriage value.

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The government's advisory service for leaseholders describes it as the increase in the value of the property once the lease has been extended. The "profit", as it calls it, is then shared between the freeholder and leaseholder, hence the payment. Beyond 80 years, according to the law, the value is zero.