Entrepreneurs relief sale of business to two different buyers??

Entrepreneurs relief sale of business to two...

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This is probably too hard for Friday afternoon.
My partnership h and w are selling their hotel property and business. Easy, it 10% cgt.

But then the buyers accountant called yesterday and there are two transaction all happening on same day but in the set order as below.

Sell hotel property to overseas company
That company grants a lease to my client so that for five mins they have a hotel business but then a commitment to pay rent.
My h and w clients then sell the hotel business, ie f and f, g/w and stock to a uk company.

So my client now has two sales and ent relief is my main concern on the sales proceeds for the hotel bricks and mortar. The second disposal is sale of a business no problem but that accounts for about 8% of total proceeds?

Am in unnecessarily worrying about 28% on the big sum??

Is the sale of a building the material sale of a business if they haven,t sold the actual business albeit they are going to sell it ten minutes later.
Oh, the two buyers are unconnected.

Many thanks

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By Alan Deakin
01st Aug 2014 16:49

I would say that the first sale is a sale of a business asset and not a sale of a business.

That said, the date of sale for both the hotel and the hotel business will have the same date on it.  

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By Steve Kesby
01st Aug 2014 17:30

For the sale of an asset...

... to qualify, it must be in use for the purposes of the business at the time the business ceases.

That means the freehold interest is being sold before the business ceases and won't technically be in use for the purposes of the business at cessation.

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By GuestXXX
17th Mar 2015 17:15

.

 

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By User deleted
04th Aug 2014 09:35

Close for 'refurbishment' with a sign saying "we will soon be re-opening under new management"

The property sale will then happen after the cessation of trade, but immediately prior to the disposal of the trade

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