My client Ringo owns 100% of the shares in Thomas Ltd, a train manufacturing company.

Ringo has also owned the commercial premises that Thomas Ltd trades from since May 2000. It was bought for £200,000 and is now worth £500,000. There is no mortgage on the property, but Ringo charges rent for the use of the property.

Ringo now wishes to incorporate the premises into Thomas Ltd, in exchange for an issue of shares.

I know that incorporation relief requires a ‘business’ to exist.

Will incorporation relief be available in this situation, as a business is carried on from the trading premises, or would Ringo have to show that he is personally operating a property investment business regarding the premises?