1st Friday
Tax Chat

Entrepreneurs relief – Charging rent for business premises

Entrepreneurs relief – Charging rent for business premises

Many company shareholders, and business partners, personally own the trading premises from which their company, or partnership, operate. Charging the company rent to use the premises might be considered to be a tax efficient way of a shareholder extracting profitsespecially in light of the recent increase in the tax rates applied to dividends.

However before doing this it is worth bearing in mind that this may have an impact on the availability of entrepreneurs relief “ER” in the future.

ER can be claimed by an individual on the sale of the business premises, made at the same time as, or close to, the sale of the trading company shares or partnership interest.

A number of conditions have to met before ER is available in this case. One of the conditions is that if the company has paid the individual rent to use the property, then ER is not available.

It is therefore very important to ensure that you carefully consider your plans before starting to charge rents.

For more information, please contact Lesley Sutton on 01484 550037 or email

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