New queries, issue 4656

Leasing flats

Entrepreneurs’ relief on mixed-use asset.

My client has disposed of his sole trade business the assets of which include a lease over the building from which he traded.

The lease includes four residential flats generally let to tenants during the period of ownership.

I am now looking into the availability of entrepreneurs’ relief in respect of the disposal of the lease because it is associated with the cessation of the trade.

I have read that entrepreneurs’ relief is not restricted where there has been mixed use of the asset. But it is not clear whether HMRC would accept the lease as a single asset so that entrepreneurs’ relief is available against the whole mixed-use gain or whether the business premises and flats would be viewed as separately identifiable assets within the overarching lease. In the latter case entrepreneurs’ relief is restricted to the...