Purchasing a commercial property as part of a business acquisition

Posted on March 3, 2026

Buying a business that includes commercial property can be complicated. The way you structure the purchase, whether as an asset purchase or a share purchase, can have major legal and tax consequences. Here’s what you need to know to make an informed decision.

Asset Purchase or Share Purchase

Asset Purchase: You choose the assets you want equipment, stock, employees, and can leave unwanted liabilities behind. Property can either be purchased outright, or the lease can be assigned to you.
Share Purchase: You buy the company that owns the property. This can sometimes reduce taxes, but you also inherit all the company’s liabilities.

In most cases, businesses involving property are sold via an asset purchase because it allows greater control over what you acquire.

Buying the commercial property

What should you check when buying the commercial property as part of a business acquisition:

Is the property owned outright?

If the business owns the property (freehold or long leasehold), the sale includes transferring ownership. Important steps include:

Checking the title for restrictions, mortgages, or other encumbrances.
Conducting searches (local authority, environmental, drainage) to uncover any hidden risks.

Is the property leased?

If the business only has a lease, it must be assigned to you along with the business. Things to consider:

Landlord consent is usually required.
Without proper assignment, you could lose access, and the seller could remain liable for the lease.

“Supporting business owners through property-related transactions is as much about understanding their growth plans as it is about handling legal complexities. Ensuring both legal certainty and commercial viability for clients is vital,” says Commercial Property Solicitor, Gary Jones.

What is an asset purchase agreement?

The Asset Purchase Agreement (APA) sets out what you are buying, including:

Inventory, equipment, customer lists, business name, goodwill, and transferring employees.
Liabilities, such as debts, usually remain with the seller.
Price and payment terms.
Warranties from the seller covering the condition, ownership, and compliance of assets.
Employee transfer details including position, hours, pay, and length of service.

What financial matters should you consider?

VAT & Capital Gains Tax (CGT): If sold as a going concern, the transaction may qualify as a Transfer of a Going Concern (TOGC), potentially excluding VAT. Professional advice is essential.
Stamp Duty Land Tax (SDLT): May apply to property or lease value.
Apportionments: Costs like rent, business rates, and utilities are split between buyer and seller based on the completion date.

Protecting yourself and business

Decide if an asset purchase or share purchase is right for your goals.
Conduct thorough property and lease checks to avoid surprises.
Ensure the APA clearly lists all assets, liabilities, employees, and warranties.
Seek professional advice for VAT, CGT, and SDLT implications.

Careful planning and due diligence are essential to a successful business and property acquisition.

How can we help?

For legal advice on selling a commercial property or buying a property as part of a business aquisition, contact our expert commercial property solicitors on 0161 785 3500 or email enquiries@pearsonlegal.co.uk.

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.