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Investment in Business - freehold or leasehold

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

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cdhy1
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Posts: 1
Joined: Thu Nov 17, 2011 7:49 pm
Location: USA

Investment in Business - freehold or leasehold

Post by cdhy1 » Thu Nov 17, 2011 8:02 pm

I am interested in acquiring a small business, and am looking into freehold, leasehold, and franchise possibilities. I am also planning ahead to make the renewal at Year 3 all the easier.

I realize that investing all 200K in a freehold business would meet the visa requirement. Could the 200K be split among the leasehold acquisition fee, several years of rent, and upgrades to the business? For example, suppose a restaurant had a leasehold fee of 100K, and annual rent of 50K. and required 20K in equipment upgrades. I would have spent 220K in two calendar years. Or is rent not considered in the equation?

Thanks in advance.

Lucapooka
Respected Guru
Posts: 7616
Joined: Sun Aug 14, 2011 10:30 am
Location: Brasil

Post by Lucapooka » Thu Nov 17, 2011 8:52 pm

All that matters is that the money has been invested into the business and is not held outside the business. If the business has legitimate costs such as rent, wages, etc. then that is part of the operating expenses of the business.

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