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Partnership changes and GP premises complications

One of the consequences of falling incomes for GP partners is the reduction in the discrepancy between partners and salaried GPs.

This week I have spoken to three practices which have decided to take on a new partner, and a partner who has decided to go back to being a GP. The premises can cause some interesting complications.

In the old days you could extend or develop your surgery with grants or savings, and also get a rent increase on the extension. Now, if you accept the grant, you don’t get the rent for 10 years. So what do you do if you have a partnership change in the 10 years?

Premises are usually valued on a multiple of the rent – but which rent should be used, the normal rent or the temporarily abated rent? It will depend on where you are in the 10-year abatement period, and I presume how long a partner intends to remain with the practice.

The problem is that the rent does not gradually increase to its new level, it jumps up after 10 years.

I think I will bounce this back to the practice solicitors and let them pore over the practice agreement for a solution!

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