Ring-Fencing Freehold Assets
Protect your commercial premises from trading liabilities, customer disputes or operational insolvency within the OpCo.
Acorn Corporate Desk · OpCo/PropCo Tax & Asset Protection Modeler
OpCo/PropCo Arm's-Length Rent & DLA Calculator
Optimise how your trading business (OpCo) pays rent to your property company (PropCo). Model HMRC-compliant market rent, Corporation Tax relief, freehold ring-fencing and a Director's Loan Account.
Model Your OpCo/PropCo Structure BelowDual-company strategy
The 4 advantages of an OpCo/PropCo structure
100% Tax-Deductible Operating Rent
Qualifying rent paid by OpCo to PropCo is ordinarily a deductible trading expense, subject to commerciality and professional advice.
Director's Loan Account (DLA) Creation
Injecting personal equity into PropCo may create a DLA balance, enabling repayments from future rental cash flow subject to correct accounting treatment.
Seamless Commercial Refinance
Lenders can underwrite PropCo debt against a long-term commercial lease supported by OpCo trading profits.
OpCo/PropCo Rent & DLA Calculator
A. OpCo Trading & Property Baseline
£400,000
£50,000£2,000,000
£1,200,000
£200,000£5,000,000
£650,000
£0£3,500,000
£250,000
£10,000£1,000,000
B. Arm's-Length Rent & Yield Settings
7.5%
5.0%10.0%
DSCR and cash-flow use an indicative 8.5% annual mortgage debt-service assumption. DLA treatment, available deductions and tax outcomes require accountant review.
| Recommended HMRC Arm's-Length Annual Market Rent | £90,000 |
|---|---|
| Annual OpCo Corporation Tax Reduction | £22,50025% applied to rent up to the modelled trading profit; actual relief depends on deductibility and circumstances. |
| Initial Director's Loan Account Created | £800,000Requested model: cash injected plus positive net equity. An accountant must confirm the legally credited DLA amount. |
| Annual Tax-Free DLA Cash Extraction Potential | £34,750Indicative cash available after modelled debt service, before PropCo tax, costs and professional adjustments. |
| PropCo Debt Service Coverage Ratio | 1.63x |
HMRC Market Rent Compliance
To support HMRC compliance, rent charged from OpCo to PropCo should reflect documented open-market RICS evidence at approximately 7.5%. Artificially high rent may be challenged and can create tax consequences.
Commercial Mortgage Feasibility
The proposed arm's-length rent of £90,000 provides 1.63x indicative DSCR. This may support consideration of commercial refinancing up to 75% LTV, subject to underwriting.
Download Your OpCo/PropCo Structuring & Tax Audit (PDF)
Convert your calculations into a six-page Structuring Report covering lease covenants, indicative Corporation Tax savings and lender refinancing options.
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Critical Tax & Legal Notice
Acorn.finance is a specialist credit broker authorised and regulated by the FCA (#660207), not a tax advisory firm, chartered accountant, or legal practice. OpCo/PropCo corporate arrangements, arm's-length rent determinations, Stamp Duty Land Tax (SDLT), and Director's Loan Account (DLA) treatments carry strict HMRC compliance requirements. Always consult a qualified chartered accountant and tax specialist before altering lease structures or corporate ownership.