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Entitlement to entrepreneurs’ relief when one partner sells assets to others
We act for some doctors where there is some confusion over practice premises rent and whether entrepreneurs’ relief is available. An example would be a general practice with five partners.
The practice premises are owned by two partners who borrowed to fund the purchase. Collectively the partnership pays the loan interest. Our interpretation of TCGA 1992 s 169S(5) for ER is that this is a form of rent by the non-property owning partners. In other cases there may be a straightforward “rent” or prior profit share agreement.
Typically the most senior partners (ie closest to retirement) own the premises. Because of the restrictions on the sale of goodwill by medical practices the only asset subject to capital gains tax on retirement will be the premises.
Will their sale be a material disposal under TCGA 1992 s 169I(2)(b) or an associated disposal under...
