Owner-Managed Businesses

Personal or company ownership

Produced by Tolley
  • 06 Dec 2021 13:30

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Personal or company ownership
  • General principles
  • Individual as sole trader
  • Partnerships and company structures
  • Acquisition by partnership
  • General partnership (other than under Scottish law)
  • General partners under Scottish law and Limited Liability Partnerships (LLPs)
  • Acquisition by individual partner
  • Acquisition by own company
  • Acquisition by company director

Personal or company ownership

General principles

The implications of decisions involving property go far wider than taxation. Before committing to a property acquisition, and deciding how it should be held, the whole picture should be considered, and advice taken. For instance, the owners should consider what the consequences are for finance and insurance purposes, or what the legal positions of the business owners are if there are disputes.

The tax issues on acquisition should be considered in conjunction with those likely to apply on disposal. This note does not, however, cover the tax issues on disposal of a lease. For guidance on the tax issues on disposal of a lease, see the Sales of leases guidance note.

Individual as sole trader

On acquisition the sole trader can choose whether to:

  1. purchase or lease the property (see the Lease or buy guidance note), and

  2. acquire the property in their own name, or in joint names with their spouse or civil partner (see the Joint names with spouse or civil partner guidance note)

On disposal the sole trader can usually access business asset disposal relief (previously known as entrepreneurs’ relief) or rollover relief, providing the conditions for those reliefs are met. See the Conditions for business assets disposal relief and Rollover relief guidance notes for more information.

Partnerships and company structures

If the individual is a partner, or sets up their own company, they have the same choices on acquisition as a sole trader. In addition, the individual can also decide whether to hold the property personally, or in

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