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The swing from entrepreneurs’ relief towards capital allowances

06 May 2020 / Mark Anthistle
Issue: 4742 / Categories: Comment & Analysis
Which way?

Key points

  • Commercial property owners may choose not to charge their own company market rate rent.
  • If less than market rate rent is charged capital allowances claims may be reduced.
  • Entrepreneurs’ relief is not available on property that has been let.
  • New entrepreneurs’ relief limit may make it more beneficial to charge market rate rent and claim capital allowances.

The question of whether owners of commercial property should charge rent to connected tenant companies has always hinged on weighing up entrepreneurs’ relief against capital allowances.

It is not usually possible to claim entrepreneurs’ relief on a property that is let. Indeed many owners have opted not to charge rent in the past so they can continue to take advantage of this relief which has usually been the more generous of the...

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