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JGM
JGM, Solicitor
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Experience:  30 years as a practising solicitor.
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I am selling my law business to another law firm over 6 years

Resolved Question:

I am selling my law business to another law firm over 6 years for £240,000. There is no property or equipment just good will. The business currently ears about £37,000 from residual income from storing Wills and a further £50,000 from probate and new client Wills etc. I will be paid £40,000 per year. Will I have to pay the whole CGT the first year or over the 6 years and will I get full Entrepreneurial relief. I am 64 and my wife is 59 (both directors)
Submitted: 1 year ago.
Category: Law
Expert:  JGM replied 1 year ago.
Thank you for your question.
As the consideration will be received over a period exceeding 18 months, you can apply to HMRC to pay the CGT in instalments not exceeding the later of eight years or receipt of the last instalment.
So you could defer the tax until year 5.
You qualify for entrepreneurs relief if you dispose of:
a. all or part of your business as a sole trader or business partner - including the business’s assets after it closed
b. shares in a company where you have at least 5% of shares and voting rights (known as a ‘personal company’)
c. assets you lent to your business or personal company
So yes you will qualify.
I hope this helps.
Please leave a positive response so that I am credited for my time.
JGM, Solicitor
Category: Law
Satisfied Customers: 10661
Experience: 30 years as a practising solicitor.
JGM and 2 other Law Specialists are ready to help you
Expert:  JGM replied 1 year ago.
Re my answer above the following article may be of help to you:
http://www.tax.org.uk/Resources/CIOT/Documents/2011/09/CGT-DC.pdf

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