Entrepreneurs Relief on Sale of building

[Jambo55]

Hi all,

I've read around this subject but I'd be really grateful for your input.

An individual owns a commercial office building personally, that is let to 4 different businesses, his is one of them he occupies around 25% - he wants to sell the building, but has a lease in place so will continue to rent the office for his own business use. My question is I think that the property disposal would qualify for entrepreneurs relief, but I have something nagging in the back of my mind that because the building will continue to be occupied / rented by the former owner, it isnt classed as a significant proportion disposal for ER - am I right or just being paranoid here! thanks in advance

[AdamS93]

On the information provided the sale will not qualify for entrepreneurs relief.

Firstly, the associated disposal rules only apply when the company has use of the build and is NOT charged rent. The office building has to be treated as a normal investment property that the individual owns. Secondly, it has to be sold within 3 years of the business/shares being sold and it sounds like he still owns the company. The good news is that it is commercial property so 20% CGT rather than 28%.

[Jambo55]

Thanks Adam thats really useful

[Jambo55]

Adam - just a thought - as long as the business ceases to trade or is sold within 3 years of the building sales date ER would apply?

There hasnt been any rent charged for the premises so I'm fairly confortable with that, thanks again.