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01 March 2011
A husband and wife run a retail business from a property that they own. They now wish to bring their son into partnership, but not as a co-owner of the property
My clients are a husband and wife partnership and they have operated a very successful retail business for more than 30 years.
The business operates from a freehold property owned by the partnership. The property is all retail with no living accommodation and appears in the partnership balance sheet.
The couple wish to introduce their son into the business as an equity partner with 50% of the profits. He will have an interest in the goodwill and other assets of the business but not in the freehold.
It is not intended that any rent will be paid in connection with the property.
It has been suggested to me that I should leave the freehold property in the balance sheet and create separate property capital accounts equivalent to the carrying cost of the freehold.
It is considered that this will ensure that the property will continue to qualify for...
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