Commercial Property Purchase Plan

This will help you calculate the most effective method to acquire a commercial property for use in your business.

Let's begin

Step 1 - Where?

Please enter the UK postcode of your target property:

Postcode < Previous Next > Save >

Step 2 - About you

Please enter your name and contact details

Name Company Name Email Address Telephone Number < Previous Next > Save >

Step 3 - How big?

Please enter the size of the building in square feet

Tip

If you know the size in square meters, multiply it by 10.76 to convert it to square feet

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Step 4 - How much?

What is the open market cost of the building excluding incidental costs?

What are the approximate incidental costs, as a percentage of the price for the building?

30%

Tip

Include Legal, Agents, Bank etc fees, land registry, SDLT and irrecoverable VAT

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Step 5 - How long?

What is the planning horizon for this project, in years?

1 year

20 years

Tip

We need to know your financial appraisal period: typically it will be the mortgage term, or maybe it will be the number of years to planned retirement date, or other exit. Or maybe you know how long you plan to use the building for before you sell it.

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Step 6 - Rent price?

How much would the rent be, per square foot, if you were to rent this building on the open market?

Tip

Average out any incentives. Divide the rent by 10.76 if you only know it per square metre.

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Step 7 - Business tax rate

What rate of tax does your business pay?

60%

Tip

If you are a UK trading company, it's probably 20 or 21%. If you have lots of losses, use 0%. If you are a sole trader, partnership or LLP, maybe use the maximum tax and NIC rate of 47%

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Step 8 - Individual tax rate

What rate of income tax do you pay?

60%

What rate of capital gains tax do you pay?

60%

Tip

If you are a high earner, it's probably 45% for income and 28% for gains. If you are not resident in the UK, use at least the UK standard rate of 20% and 28% for gains.

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Step 9 - Debt

How much money are you going to borrow? Express it as a percentage of the basic purchase price.

100%

Tip

If you are purchasing outright with no mortgage or other debt, enter 0%

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Step 10 - How Long?

What is the mortgage term, in years?

0 year

25 years

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Step 11 - Interest rates

What rate will apply to your mortgage, if any?

30%

What is your cost of capital?

30%

Tip

Many business people do not know this. They should. It's the rate you use for investment appraisals, or the return you can make from your investments. If you have lots of money on deposit earning nothing or little, use that low rate. If you have lots of options and ideas for using capital, you will probably place a high price on it. Venture capitalists do!

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Step 12 - Growth

Do you expect the value of your building to go up or down over the planning horizon? Enter the average annual growth rate you expect

-100%

100%

Tip

The value of buildings can go down as well as up! It's a brave investor who assumes price growth. Enter 0 to ignore growth prospects. Enter a minus number if you are overpaying and that the value will go down.

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Step 13 - Exit Arrangements

If you are the owner and decision maker, you will probably want to appraise the costs assuming that in the end all the value ends up in your pocket, UK tax paid. To do this we need input as to your possible exit method. Please click on one of the following:

Share sale Assets sale Gift e.g. to family Ignore exit planning

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Summary

Where?

About you

Name

Company Name

Email Address

Telephone Number

How big?

How Much?

Open Market costs?

Incidental costs?

How long?

Rent price?

Business tax rate

Individual tax rate

Income tax

Capital gains

Debt?

How long?

Interest rates

Mortgage rate

Cost of capital

Growth

Exit arrangements

All my details are correct - Continue

Disclaimer

We now have enough information to appraise your property.

This is a simplified tool to answer a complex question and not all inputs, objectives or scenarios have been tested. Its output is a guide only and it is no alternative to a proper appraisal of your exact circumstances. Because of its generic nature and limitations it could report the wrong answer!

I accept these this warning and wish to continue

Cancel

Calculating...

Please be patient whilst we work out the best method of purchase for you

Our recommendation

We suggest that you...

We think that the post tax, effective cost of using the building over the appraisal period, per square foot, for various possible ownership scenarios, is as follows:

Method	Overall lifetime cost £ psf
Rent it	£0
Buy it in your business	£0
Buy it using our Commercial Property Purchase plan	£0
Buy it yourself	£0
Buy it in your pension scheme	£0

Let's talk...

If you would like to talk through our recommendation in more detail, please contact our Tax Consultancy team on

01223 696116

or email:

cppp@pricebailey.co.uk