At AccounTax Zone, we’ve seen how owning property through your trading company can look like a smart move, but it can also create hidden tax problems down the line.
One of our construction clients had bought a property under their limited company. It seemed simple at first: the company had cash, the property was an investment, and it all felt straightforward.
But as their business grew, they ran into a few unexpected issues.
The Problem: Mixing Trading and Investment
When you hold investment property (like rental units or land) inside a trading company, it can:
- Reduce or remove your eligibility for Business Asset Disposal Relief (which means a higher Capital Gains Tax bill when you sell)
- Risk losing Business Property Relief for inheritance tax purposes
- Blur the line between trading and investment, which HMRC doesn’t like
- Put all assets at risk if the business faces legal claims, debts, or insolvency.Â
- Increase the loss of tax efficiency in Exit Planning, as it can trigger SDLT, CGT, etc.
What looked like a tax-neutral setup at first turned into a long-term risk.
What We Did: Restructure for Protection and Relief
We worked with the client to restructure their setup — separating the investment property from the trading business.
This meant:
- Reducing exposure to unexpected tax liabilities
- Protecting the trading company’s valuable reliefs
- Making the business more attractive for future planning or sale
The Result: Peace of Mind and Long-Term Savings
By separating property from trading activities, our client gained:
- Clarity on what belongs to which part of the business
- Tax efficiency when it comes to selling, succession, or exit planning
- Confidence that they’re not walking into avoidable tax traps
Planning Ahead Makes All the Difference
If you hold property inside your trading company — or are thinking about it — it’s worth reviewing the structure. What works today may not work tomorrow.
At AccounTax Zone, we help construction business owners plan ahead so they don’t get caught out later.
Let us know if you’d like us to take a look at your setup.
You may also like to read: How One IT Founder Used a SSAS Pension to Cut Tax and Reinvest in Their Business
