It is a set formula which is covered in Schedule 13 Part II of the Leasehold Reform, Housing and Urban Development Act 1993 and is a total of:
a) The diminution in value of the landlord's interest in the flat,
b) The landlord's share of the marriage value and
c) Compensation for loss arising from the grant of the new lease.
First Tier Tribunal (Property Chamber) – formerly Leasehold Valuation Tribunal (LVT)
Effectively an informal 'Property Court' designed to settle disputes between leaseholders and freeholders. An example of when it might be used is if you extend your lease but can't agree the Premium (fee) with the landlord; you would then refer the matter to your local Tribunal and they will set the Premium payable for the extension.
A lease is enfranchised when the leaseholder (house) or leaseholders (block of flats) acquire / buy the freehold and take full ownership of the property.
When a lease comes to a natural end, e.g. after 99/125 years, ownership of the property goes back to the landlord.
The payment by the leaseholder to the freeholder when the lease is extended (or Enfranchised) is the Premium.