Purchasing a commercial property? Your accountants advice could save you thousands

by | Oct 4, 2023

Andrew Filbee

Llandudno director, Andrew Filbee explains why its not just property agents and solicitors that should be involved when a business is looking at buying a commercial site. An accountant can offer invaluable advice that could save businesses thousands of pounds in tax relief.

One of Andrew’s clients approached him as they were going to buy a commercial unit for £120k. They already had the money saved up in their business bank account. They could have proceeded with the purchased without any issues, but also without any tax relief.

Andrew explains how he offered his clients advice and the outcome from this. “The business in question was a two director firm and neither director had previously made any pension provisions. I suggested they speak to a financial advisor regarding setting up a SSAS (pension fund) to buy the premises instead. The company could then make an employer pension contribution of £120,000 and save Corporation tax at 26.5%, a total of £31,800. The rental value for the unit was assessed as £10,000 per annum saving them an additional £2,650 Corporation Tax every year and ensuring they effectively “save” an additional £10,000 per year into their pension fund. Over a 10 year period that would be total tax savings of £58,300”.

“In addition, there will be no Capital Gains Tax on the eventual sale of the premises. The value of the property has been removed from the company balance sheet and therefore there are further potential savings on taxes that could be applicable if the company was closed down on retirement”.

If you are considering purchasing a commercial property of any time for your business, please contact Andrew for advice on the most tax efficient way to do this.

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