Purchasing business:?freehold VS leasehold?

[abcsusan]

Hello folks,

Regarding the 200k route, I have the following questions for the gurus here .

As stated in the guideline, "Invested or spent by the applicant’s business excludes spending
buying the business from a previous owner, where the money ultimately goes to that previous owner (irrespective of whether it is received or held directly or indirectly by that previous owner) rather then into the business being purchased. This applies regardless of whether the money is channelled through the business en route to the previous owner, for example by means of the applicant or business purchasing ‘goodwill’ or other assets which were previously part of the business,"

The guideline also stated " If they acquire any property for the business, which includes residential accommodation, the value of the residential part of the property is not acceptable as investment in the business" -----------So applicant can use 200k to buying non residential property!!!!


As a result, money spent on buying a leasehold business or goodwill cannot be included in the 200k investment. However, the guideline does not clarify the situation when an applicant buy a freehold business which include property and business together.


MY question is, if I buy a freehold business for 240k, of which 200k is property value and business for 40k. Can I meet the requirements when I apply for extension? Suppose i am employing 2 fulltme UK workers for one year

bw

Lee

[nvkateryna]

Hello folks,

Regarding the 200k route, I have the following questions for the gurus here .

As stated in the guideline, "Invested or spent by the applicant’s business excludes spending
buying the business from a previous owner, where the money ultimately goes to that previous owner (irrespective of whether it is received or held directly or indirectly by that previous owner) rather then into the business being purchased. This applies regardless of whether the money is channelled through the business en route to the previous owner, for example by means of the applicant or business purchasing ‘goodwill’ or other assets which were previously part of the business,"

The guideline also stated " If they acquire any property for the business, which includes residential accommodation, the value of the residential part of the property is not acceptable as investment in the business" -----------So applicant can use 200k to buying non residential property!!!!


As a result, money spent on buying a leasehold business or goodwill cannot be included in the 200k investment. However, the guideline does not clarify the situation when an applicant buy a freehold business which include property and business together.


MY question is, if I buy a freehold business for 240k, of which 200k is property value and business for 40k. Can I meet the requirements when I apply for extension? Suppose i am employing 2 fulltme UK workers for one year

bw

Lee

Nope, you cannot, because money will go to the previous owner, no matter if it's leasehold or freehold. Which basically means that you didn't do anything to improve the business -> there is no value in your actions. You have to spend 200k doing business, that would include things like staff salaries, equipment, refurbishments, stock (inventory) and so on. Don't know what business you are panning to do, but it should not be a big deal to spend 200k in 3 years if it's running.
P.S. Got this info from my solicitor

[abcsusan]

Hello，

Thank you for your reply. I want to buy a freehold postoffice. It is a huge property with an office and a large store room. I am also want to move my existing business(import and export) into the property. In fact, my existing business is doing well and is employing 2 full-time workers.

In my case, I think it is better to turn to purchase an empty property and do my business. Is that easier to apply for extension?

be

lee

[9elizabeth]

Hello abcsusan,
Have you sorted it yet or not. I am doing the same. Buying a property in the company name and had a long meeting with the solicitor and he is very confident that it can be done. Do you have a number I can call you on to make sure all is correct!

[noajthan]

Member in question last visited our little community almost a year ago.

I would question the logic of investing (tying up) working capital into freehold property. Property speculation does not fly in these types of visas.
Suggest lease rather than buy.

[9elizabeth]

buying a property has its own benefits and lease has its own. I am into manufacturing business and do some import and export from China. Buying a property suits me most.
Is there anybody here who has bought a property and got extension?

[zimba]

Money must be invested in a business you OWN not to purchase or acquire one. There is no justification for spending your entire capital on a property

[buntyz]

i bought the existing freehold business and they have accepted my investment.