CG64085 - Business Asset Disposal Relief: trading company and holding company of a trading group - surplus trading property

Entrepreneurs’ Relief was renamed in Finance Act 2020 with effect from 6 April 2020. The new name is generally used in this guidance but should be read as applying to times before that date.

A company may own a property which is surplus to its immediate business requirements. You should not, for example, regard the following as necessarily indicating a non-trading activity:

• letting part of the trading premises;
• letting properties that are no longer required for the purpose of the trade in question, where the company’s, or group’s objective is to sell those properties;
• sub-letting property where it would be impractical or uneconomic in terms of the trade to assign or surrender the lease. For example, the benefit derived from disposing of the lease may be outweighed by the reverse premium payable;
• the acquisition of property (whether vacant or already let) where it can be shown that the intention is that it will be brought into use for trading activities.