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D5
Hold vs Sell vs Sale-and-Leaseback
Three ways to handle an asset when circumstances change: keep the income, take the capital, or release capital while staying in occupation.
Compare your options
Hold
Pros
- Keep the rental income
- No CGT trigger
- Retain control of the asset
Cons
- Capital stays tied up
- Exposed to the market and to voids
- Financing cost if geared
Best for: Strong income at a low financing cost with no need for capital.
Sell
Pros
- Release full net proceeds
- Remove market and refinance risk
- Rebalance the portfolio
Cons
- CGT or corporation tax on the gain
- Lose the income
- Selling costs
Best for: Marginal assets, portfolio pruning, or when capital is needed elsewhere.
Sale-and-leaseback
Pros
- Release capital and keep occupation
- Rent becomes a deductible cost
- Asset off the balance sheet
Cons
- You become a tenant with a long lease liability
- Give up future capital growth
- Gain crystallised on disposal
Best for: Owner-occupiers who want their capital working in the business.
Worked scenarios
Owner-occupier needing growth capital
| Option | Outcome |
|---|---|
| Hold | Capital stays locked in the building. |
| Sell | Frees capital but you must relocate or lease elsewhere. |
| Sale-and-leaseback | Often the fit: cash out, stay put on an FRI lease. |
Decision checklist
- Compare net sale proceeds (after CGT and costs) with the capitalised income you give up.
- For a leaseback, model the rent you would pay and the lease terms.
- Check the VAT and, for a tenanted sale, whether a TOGC applies.
- Stress-test any refinance option on interest cover.
Relevant tools
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