CGT Due on Business Disposal

[Lazy Sod]

A friend, with his business partner, has just sold a software business that they started about 10 years ago. Until last year, they had never taken any money out of the company as they have other businesses. I doubt that the business has much in the way of tangible assets, I know that they they rent their offices. What might they be able to set against CGT, will most of the sale price be likely to be classedas a capital gain?

 

[Princess Pooper]

A friend, with his business partner, has just sold a software business that they started about 10 years ago. Until last year, they had never taken any money out of the company as they have other businesses. I doubt that the business has much in the way of tangible assets, I know that they they rent their offices. What might they be able to set against CGT, will most of the sale price be likely to be classedas a capital gain?

I would imagine most of the sale value will be intellectual property and goodwill. Both are assets subject to CGT. https://www.gov.uk/tax-when-your-company-sells-assets/intangible-assets.

However, they may be able to claim Business Asset Disposal Relief (Entrepreneur's relief). Job for their accountant, not a farming forum.

 

[Lazy Sod]

I would imagine most of the sale value will be intellectual property and goodwill. Both are assets subject to CGT. https://www.gov.uk/tax-when-your-company-sells-assets/intangible-assets.

However, they may be able to claim Business Asset Disposal Relief (Entrepreneur's relief). Job for their accountant, not a farming forum.

Is there a limit on how much BADF that can be claimed? I know that they have previously sold another business.

Of course it's a job for their account, I haven't been asked for advice. I ask purely out of my own curiosity.

 

[jackrussell101]

My only advice would be for them to get on with it PDQ as Labour will increase CGT significantly in the coming years, rumour has it they want to align it with income tax levels which would mean any gains over £37k would be 40% and over £150k at 45%

 

[Lazy Sod]

I think that they've got that aspect covered.

 

[yellow belly]

business asset relief 10% is limited to 1 million in a life time
remainder at 20%

 

[robs1]

Can they roll some of it over into another business?

 

[Lazy Sod]

I know that this is one of his options.

 

[goodevans]

Perhaps you could tag them in here and they could tell us once they have taken advice,or there again they might think it is none of our business

 

[Lazy Sod]

I think that it's the latter.

 

[yellow belly]

Can they roll some of it over into another business?

If you rollover no need for business asset relief but you need to meet the requirement of rollover