Readers' forum: Leasing flats

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 the 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 gain that applies to the business premises.

I would...