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Commercial, commercial property, Lease    No Comments

I often get asked about VAT on commercial properties. Commercial properties are exempt from VAT however this exemption can be waived.

It is important for a tenant to check at the early stages of the lease negotiations as to whether or not VAT  is payable. If it is then VAT at the appropriate rate will be payable on top of the rent. If the tenant is registered for VAT this is not much of an issue it will just effect cash flow in that the tenant will have to pay the VAT out and then reclaim the VAT payment back. The problem is when the tenant is not VAT registered as they will pay VAT on the rent and will not be able to claim it back.

There is then the additional problem in that even if VAT is not payable when you initially tkae on the lease it could become payable during the term of the lease as the landlord can opt to charge VAT on the property at any time.

Is there anything the tenant can do?

Yes. In the initial negotiations if VAT is payable and the tenant is not VAT registered they can try and negotiate a lower rent

If the VAT  is not payable at the start of the lease and the tenant wants to ensure that this remains the same throughout the term of the lease, then the tenant can try and  negotiate that a clause be included in the lease to state that during the term the landlord will not opt to charge VAT.

Any landlord realistically will wish to avoid both of the options above this is why it is important for a tenant at the early stages of negotiations to instruct a solicitor so that the tenant is aware of all the options available to them and  to ensure that they negotiate the best rental terms.

If you are a tenant and are thinking of taking on a lease please feel free to call me on 01623 663244 and I would be happy to assist with any enquires.

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Commercial, commercial property, Property, purchase, Uncategorized    No Comments

development land

When we are acting for developers who are purchasing a piece of land quite often mines and minerals will have been excepted.

If the mines and minerals are excepted this means that someone else has the rights to mines and minerals in, on or under the land. The risk to the developer is that the owner of the reservation of mines and minerals may allege that the foundations of any development may amount to trespass.

If you identify that the land if subject to any such reservations then the first step is to get as much information as possible about the reservation top see how they affect your planned use, such as at what depth of the mines and minerals that are reserved.

If land that you are planning to develop has rights to mines and minerals reserved then there are a number of ways to address the matter:-

1. obtain indemnity insurance, the indemnity insurance will not remove the reservation but it would mean that if a claim is made for trespass and /or access for works then a claim for losses can be made under the policy;

2. that you contact the minerals owner to ask whether they would be minded to sell their rights. Any approach to the owner of the mines and minerals should be considered seriously beforehand as once you make contact with the owner you will be prevented from obtaining indemnity insurance.

If you are a developer and have a question on mines and minerals then please do not hesitate to make contact with Christie Limb on 01623 663244.

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business, Commercial, Contract    No Comments

You may need to share important information about your business with potential partners such as investors, manufacturers, suppliers, marketing agencies, financial advisers.  It is vital that you do not assume that the information shared with these third parties is confidential.  You need to take steps to ensure that you  you protect against the risk of  third parties using confidential information about your business, or potentially passing it to competitors.  You can do this by entering into a legal contract called a Non Disclosure Agreement (NDA) also known as a Confidentiality Agreement.

A clear and concise NDA allows you to share ideas and information- “confidential information”- about your business with third parties.

 What is “Confidential information”?

“Confidential information” is generally considered to be anything that is not in the public domain.  This could cover a wide range of information about your business and how it operates- from ideas, techniques and know how; to important documents such client lists.

An NDA can protect “confidential information”, but once the information is in the public domain it is no longer confidential and so it cannot be protected.  Any NDA needs to clearly set out what is considered as “confidential information” so that the boundaries of the agreement are set and the information can be adequately protected.  This can be done without actually disclosing the “confidential information” itself (keep in mind that the agreement itself is not always confidential). For example “confidential information” could be defined in an NDA as all client lists and past purchasing records- but the definition does not have to provide the actual names of the clients or their past purchases

confidential info

Purpose

An effective NDA should restrict the use of “confidential information” to a specific purpose.  All other uses should be clearly prohibited to prevent the information from being used in any other way.  For example if you were in discussions with another business about entering into some sort of joint enterprise, then the purpose of the use of the “confidential information” would be limited in the NDA to the discussion of a joint venture.

 

Time limit

Most NDAs set a time period during which party receiving the “confidential information” must maintain its secrecy. This time period can be set by inclusion in the NDA of a specific time period- three years is a common length. Or the time period can be set in the NDA by the occurrence of a future event- for example the introduction to the market of a particular product- at which point the NDA will end.

Protection

An NDA provides legal protection for the “confidential information” of your business as long as it is covered in the agreement.  If another party breaches the NDA in place then your business would have the right to take legal action against them.

If the receiving party misuses the “confidential information” covered under an NDA then you would be entitled to take this party to Court and sue them for damages for breach of contract.  If you suspect that the receiving party may be about to breach the NDA then you can apply to Court for an order known as an injunction to stop this from happening.

We can help

NDA’s can provide your business with crucial protection to prevent other parties with whom you share confidential information in the course of business from misusing it for their own purposes or sharing it with your competitors.

NDA’s can provide your business with crucial protection to prevent other parties with whom you share confidential information in the course of business from misusing it for their own purposes or sharing it with your competitors.

If you require an NDA for use in everyday business then contact a member of our business team on 01623 663246.  We offer fixed fee legal services for our business clients.  Take a look at our Fixed Fee menu for more information.

 

 

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business, business purchase, Buy to let, Commercial, commercial property, Property    No Comments

income tax

 

Tax Tax Tax

 

Completing your tax returns? This time of year always brings to light the amount of tax that you are paying. If you are looking at pension and tax efficiencies then I urge you to consider investing in a commercial property via a pension scheme such a SIPP (self invested personal pension) or a SSAS (small self administered scheme).

 

There are a number of tax benefits for investing in a property by a SIPP and SSAS including:-

 

– growth is free from CGT

 

– tax relief at the individual or company’s highest rate

 

– rental income received by a pension scheme attracts no UK income tax

 

– on retirement 25% of the pension fund can be paid as a tax free lump sum

 

– on death before retirement the whole payment under the pension fund could be paid as a tax free lump sum i.e. no inheritance tax

 

If you need any advice on commercial property please call Christie on 01623 663244.

 

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Buy to let, Commercial, commercial property, Conveyancing, Landlord, Property, property owner    No Comments

buy to let

 

With the increase in stamp duty on the horizon for residential buy to lets you might want to now consider investing in commercial property as buy to let. The benefits of buying as commercial buy to let over residential include the following:-

– generally commercial property generate higher rental income;

– a commercial lease provides the landlord with greater protection and swifter enforcement provisions;

– commercial tenants are generally required to meet the insurance costs of the property and also all of the repairs;

– the term for commercial leases are usually for longer avoiding the landlord agents fees for re marketing and also solicitors fees for drafting new leases;

– the rent reviews provide for the rent t remain the same or are upwards only

– it is possible to claim capital allowances on commercial properties

 

If you are thinking of buying a commercial property to let then please contact me on 01623 663244 or email climb@fidler.co.uk, I would be happy to assist  with the transaction.

 

 

 

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Commercial, commercial property, Lease, Uncategorized    No Comments

blog image commercial building

 

If you own a commercial property or are thinking of investing in a commercial property with a view to letting the property out you should consider investing by way of a SIPP or a SSAS.

 

A SIPP stands for Self Invested Personal pension and a SSAS is small self administered scheme.

 

My clients who have invested through such pension schemes already either own the property and let it to their company or are buying it with a view to letting it to their company. What happens then is that the rent from their company is invested into their pension scheme.

 

The benefits of investing through a SIPP or SSAS include:-

 

– contributions into the scheme receive tax relief

– the rent received by the pension scheme is not subject to income tax

– the property when sold has not capital gains tax liability

– in most circumstances there will be no Inheritance tax liability on death

– the ownership of the property prevents the pension being an asset that could be claimed in bankruptcy

 

If you are thinking of investing in a commercial property by way of a SIPP or a SSAS I would be happy to handle the legal part of the transaction for you at a fixed fee price. please feel free to call me on 01623 663244

Christie Limb

Partner

 

 

 

 

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Commercial, commercial property, Conveyancing, Uncategorized    No Comments

imagesCAX34LB7Investing by SIPP and SSAS

 What are they?

A SIPP is a self invested personal pension and a SSAS is small self administered scheme.

Why are they of interest?

They provide for some a tax efficent way of investing.

Why look at investing by way of a SIPP or a SSAS

– growth is free from CGT

– tax relief at the individual or company’s highest rate

– rental income received by a pension scheme attracts no UK income tax

– on retirement 25% of the pension fund can be paid as a tax free lump sum

– on death before retirement the whole payment under the pension fund could be paid as a tax free lump sum i.e. no inheritance tax

The difference between a SIPP and a SSAS

SSAS

small occupational pension scheme set up by the directors

– members are usually employees or directors of the employer

– each member has a a notional share of the SSAS funds

– more flexible on investment

– can lend to the company

SIPP

SIPP is a personal pensions set up by an insurance company or specialist SIPP operator.

– open to anyone

– usually a minimum fund size

-There are usually higher running cost

 

Christie Limb

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Commercial, commercial property, Landlord, Lease, Uncategorized    No Comments

I often get asked about VAT on commercial properties. Commercial properties are exempt from VAT however this exemption can be waived.

It is important for a tenant to check at the early stages of the lease negotiations as to whether or not VAT  is payable. If it is then VAT at the appropriate rate will be payable on top of the rent. If the tenant is registered for VAT this is not much of an issue it will just effect cash flow in that the tenant will have to pay the VAT out and then reclaim the VAT payment back. The problem is when the tenant is not VAT registered as they will pay VAT on the rent and will not be able to claim it back.

There is then the additional problem in that even if VAT is not payable when you initially tkae on the lease it could become payable during the term of the lease as the landlord can opt to charge VAT on the property at any time.

Is there anything the tenant can do?

Yes. In the initial negotiations if VAT is payable and the tenant is not VAT registered he can try and negotiate a lower rent

If the VAT  is not payable at the start of the lease and the tenant wants to ensure that this remains the same throughout the term of the lease, then the tenant can a negotiate that a clause be included in the lease to state that during the term the landlord will not opt to charge VAT.

Any landlord realistically will wish to avoid both of the options above this is why it is important for a tenant at the early stages of negotiations to instruct a solicitor so that the tenant is aware of all the options available to them and  to ensure that they negotiate the best rental terms.

If you are a tenant and are thinking of taking on a lease please feel free to call me on 01623 663244 and I would be happy to assist with any enquires.

 

Christie Limb

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Auctions, Commercial, commercial property, Property, Property Auctions, purchase    No Comments

auction hammer

If you are planning to sell a commercial property at auction you need to think about the following:
1. CPSE replies (commercial property standard enquiries) these are a list of questions like the property information forms on a residential property that provides potential buyers with important information about the property such as boundaries and maintenance,  planning, environmental matters.  The issues that seem to cause the most difficulty for sellers is planning and evidence of planning permission for use along with VAT and capital allowances. It is important for the buyer to know whether VAT is payable on the purchase price, likewise a buyer may be wanting to claim capital allowances and needs information from the seller to assess such.It is better to get these answered as quickly as possible as the sooner the more information the prospective buyers have on the property.
2. Searches , in properties not sold at auction the buyer will arrange for searches such as local, drainage and environmental  to be completed. When a property is being placed into auction I would advise the seller to provide as much information as possible to prospective buyers. I would also suggest that the seller request that the buyer pays back to them the cost of the searches.
3. If the property is subject to tenancies/lease copies of the tenancies/leases will need to be provided and referred to in the contract so that any buyer knows that the property is not being sold with no one in it. Further details of the rents paid and whether there are any rent arrears will be required
It is important with an auction property to get as much information together as quickly as so that you are able to attract as many buyers as possible.
I have lots of experience in dealing with commercial properties being sold at auction and would be happy to provide you with a fixed fee quote for the work.
Please feel free to call me on 01623 448302 or email me on climb@fidler.co.uk

 

 

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Commercial    No Comments

When you are selling a business the buyer will often request that the sale contract includes a restrictive covenant against the seller that restricts the actions of the seller. The Buyer will be paying a value for the goodwill of the business and will want to ensure that this is not affected by the Seller opening a competing business in the local area or approaching the staff of the business or the current customers of the business.

The common types of restrictions include:-

1. not to compete – this prevents the seller from setting up or being involved with a competing business these are usually enforceable;

2. Not to poach customers – these usually refer to customers of the business over a period of time prior to the sale but in a small business sale it is not unheard of for there to be an outright bar on approaching any previous customers;

3. Not to approach staff – In larger business sales this may be aimed at the managers within the business, but in a small business it could be reasonable to restrict poaching of any of the members of staff;

In respect of time scales the shorter the period the more likely it is that the courts will view the restrictive covenant as reasonable but this needs to be balanced with adequate protection for the buyer. There is no clear guidance on this issue but 2 years appears to be a common time scale applied in contracts.

The other factor to consider if the geographical reach of the restrictive covenant. What is reasonable will depend on the nature of the business, where the business is based etc.

If you are buying or selling a business I strongly advise you to seek independent legal advice. Please feel free to contact me on 01623 448302 or climb@fidler.co.uk as I would be happy to provide you with a competitive quote.

Christie Limb

Partner

 

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