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Entrepreneur's relief

Q: I write regarding entrepreneur's relief from capital gains tax for GP premises. I am thinking about retiring soon. We receive notional rent from our PCT for the surgery and I was told that any business premises that received rent cannot have this relief. Is that correct?

A: Also, is there any time limit to sell the premises after the cessation of the business?

To qualify for entrepreneur's relief, the property must have been used in your business for one year, ending with the disposal of your share in it. You must retire from your business. Although as a GP practice you receive notional rent from the PCT, this is not the same as a commercial rent for leasing premises.

Suppose that when you retire you decide to keep your premises share and someone else took over the practice and paid you rent for the use of it under a lease agreement. If you sold the premises five years later, you would not be able to qualify for entrepreneur's relief as you have received a commercial rent and the premises were not used in your business.

If your business were to cease (because the practice was closing) you would have up to three years to dispose of the surgery premises.

If you are in partnership - as the business is continuing - you should dispose of your share of the premises at the same time as you retire from the partnership or soon afterwards.

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