Business surgery: How to deal with business succession planning when it comes to commercial property

If you're planning to sell, retire, or hand over your business, the way your commercial property is owned or structured can make a big difference.

Done well, it can reduce tax, create a reliable income stream, and help the transition go smoothly. Done poorly, it can delay deals and create avoidable costs.

Your business premises shouldn't be an afterthought as they can often be one of the most valuable and influential parts of your succession plan.

What Role Does the Property Play in the Business?

Start by asking a simple question: Is your property integral to the business, or an investment that happens to be used by the company? If you own your premises, it may hold significant value, but that value doesn’t always need to transfer with the business itself.

Some owners choose to retain the property and lease it to the new business owners, creating a reliable income stream post-retirement. Others prefer to sell the property along with the business as a clean break. Both approaches are valid, it comes down to your long-term goals.

Should You Separate the Property from the Trading Entity?

It’s common to hold commercial property within a separate company or pension vehicle (such as a SIPP or SSAS). If you haven’t already explored this, it’s worth reviewing with your legal and tax advisers. Separating the property can help protect it from trading risks, simplify the eventual sale of the business, and support more efficient inheritance or retirement planning.

However, these structures need to be carefully set up and maintained. Transferring a property out of your trading business, or into a pension can trigger tax consequences, so timing and professional input are crucial.

What About Leased Premises?

If you lease your premises, you’ll want to review the lease well before any handover. Check whether the lease is assignable and whether any personal guarantees are in place. Successors may be unable, or unwilling, to take on the same obligations, especially if the lease terms are outdated or restrictive. Where needed, consider negotiating more flexible terms to support a smoother transition.

Plan Early, Review Often

Succession planning is never a one-off task. Property values change, business needs evolve, and personal circumstances shift. What made sense five years ago may not serve your goals today.

Looking ahead?

We help business owners align their commercial property position with their long-term succession plans. Whether you're selling, retiring, or handing over to family, our team offers practical advice on both Commercial Property and Business Succession Planning to support your future plans.

Get in touch with us today on 0330 912 8338 or visit https://atkinsdellow.com/ for a no-obligation chat.

Simon Button, Senior Associate at Atkins Dellow