Buying commercial property or land before the Budget

We have seen a spike in requests to purchase commercial property or land before the Budget date, which has been set for 30th October 2024.

In many cases these transactions are being done at haste to avoid potential changes to the rate or scope of Capital Gains Tax on disposal of these assets, which some believe could be announced in the Budget.

We have no knowledge of any potential changes, but with any property purchase, the timescales are largely dependant on the legal processes; many solicitors are reporting that increased volumes will inevitably mean that it may not be practical to achieve a quick transaction, particularly if the process hasn’t already been underway for some time.

We are not tax or legal experts, but where the pension scheme cannot meet its requirements in time for the Budget, someone else (such as the customer or their business) could purchase the property or land at market value and then to sell it to their pension scheme later, noting that this would result in additional legal fees and may also increase the amount of Stamp Duty Land Tax, Land and Buildings Transfer Tax or Land Transfer Tax, depending on where the property or land is in the UK. Note that when a pension scheme buys assets from a connected party, including the customer, a relative or their business, this must be done on an arm’s length basis, at the value set by a RICS qualified surveyor.

If you are considering purchasing a property in this way, please firstly speak to your financial adviser, solicitor and tax adviser before considering whether this option would work for you.

September 30th, 2024