Future‑Proofing a Commercial Property Investment

The Challenge

Our client was acquiring a commercial property valued at around £1 million and wanted to ensure the structure of the purchase was as tax-efficient and future-proof as possible. Key considerations included income and corporation tax reliefs, inheritance tax (IHT), and longer-term succession planning. The property would be held long-term and used by a separate trading business (owned 50% by our client).

The Solution

We explored a range of ownership options—personal, corporate, and group structures—while factoring in the potential impact on key tax reliefs. This included considering Business Property Relief (BPR) and Business Asset Disposal Relief (BADR) due to the property’s use in a trading business and whether these reliefs might be available in the longer term. We also discussed the availability of Capital Allowances and considered the VAT implications given an option to tax was on the property. Alongside this we also factored in how the structure could support future IHT planning.

The Value

The client opted for corporate ownership outside of the existing group, providing a standalone vehicle that could be used for long-term IHT planning. The purchase was funded through a director’s loan, allowing efficient extraction of funds from the trading business. This structure gave the client flexibility, asset protection, and a clear path for future planning, all while keeping the property available for business use.