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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13941
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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TAX,i am 75 yrs, retiring again soon, self employed sole

Resolved Question:

TAX,i am 75 yrs, retiring again soon, self employed sole trader,company assets about 100k,tax liabilities for years 14/15 and 15/16 paid or agreed with HMRC,when I stop ,close down to retire, whats the tax liability as regards ***** ***** assets, my company has no debts of any kind, don't owe anybody anything, everything paid for, except to HMRC (3k owed),based UK.
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
My accountant in my opinion appears not to give best advice sometimes.
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer (and I worked for many years at HMRC and now run my own accountancy business)
The assets will have to be considered for capital gains - but this is dealt with in the main guise of capital allowances and whether the asset has depreciated and what depreciation has been claimed.
If you could advise
1) What assets are we referring to and each ones approx value
2) If you know what Capital allowance is outstanding as value bot claimed from HMRC via self assessment
3) What you plan to do with the assets once the business ceases
As this answer would be too vast to cover every case scenario so I need to whittle down some of the factors!
Thanks
Sam
Customer: replied 1 year ago.
(1) Assets, 4x4,owned 5 years £10k....van ,new march 2015 £10k.....boat new march 2014,£20k.....plant/machinery/tools/stock £30k...... property,ground and garage £25k.....cash in bank,£10k....rough figures, all paid for.
(2) capital allowance ,paperwork not at hand.
(3) sell most, keep van.
Customer: replied 1 year ago.
keep property.
Expert:  Sam replied 1 year ago.
Hi
Thanks for your response
I will come onto the property in a moment as this has different rules and have concerns how this may actually fit into the business
And also as you do not have the capital allowance figures to hand - I will advise how these assets are treated generically
First lets get the money out of the way - I would assume that this relates to past profits on which tax has already been suffered, so you can withdraw/have this money with no further tax implications - if this is not the case, then please advise further
The 4x 4 - when sold if you sell it for MORE than the capital allowance position value - then you have a balancing charge to pay (pay tax on the difference between the capital allowance or Annual Investment allowance value and the sale price. But if you sell it for LESS then you are awarded additional capital allowances.
And any private use taken into account of course.
Same with the plant and machinery -
But the stock would be included as profits for what you sold for and your accountant (if you had one) would build this in with cost of sales for the year (which looks at stock on hand at year start plus stock bought, less stock sold, and stock on hand which creates the true costs of sales for the year) so this forms directly part of the profits and expenditure within the accounts.
The boat and property - how do these relate to the business ?? Were they used in the business as these seem like personal assets not business
And the garage is this attached to the property - is this property your home
And then the van - was this 100% business use - if there is a capital allowance figure outstanding them you will need to "purchase" the van from the business OR claim this all as the market value as a balancing charge.
Look forward to a response re the van, property and the boat. It would also be useful to know what you business trade is so I be sure I take all business elements into account with my answers.
Thanks
Sam
Customer: replied 1 year ago.
My business works well, i buy sell ex oil rig lifeboats,ONLY ME IN UK, i also have an agency for small fishing boats, hence the boat, its a demonstrator, i bought it to gain the agency.
I rent property and ground to store and work on lifeboats, i bought a piece of land and a brick garage to use as part of my business, not attached to my home, used as a small workshop and storage area near local harbour.
Van 100% business use, 4x4 used for towing boats as van too small.
As i am past retiral age i work when i want to,i have no loans or overdraft, i make money all the same, good profits for my turn over,just managing to keep under vat threshold with difficulty.
my tax was £7233 for year 14/15, showing 32k profit,a one off, nice one tho, did a deal with HMRC, i just paid them £3500, balance in three monthly payments, includes £400 for year 15/16 tax, i could have paid it all but have a big,big deal coming off, that will keep me till APRIL ++.
Expert:  Sam replied 1 year ago.
Hi
Thanks for your response and the additional information
Then its private property with the garage and land used for business by your home which I assume you are paying business rates on ? If not then this has no impact as an asset in the business as there would have been only a token claim for heating and any lighting that could have been claimed through the business
The boat is an issue as I do not see how this can have any bearing - and I am not sure what is meant that you bought it to gain agency? Can you expand on what this means.
Van if 100% business use will see you having to add back in the market value as a balancing charge if you return it (less any capital allowances still due)
So in the main other than the van and the 4 x 4 and plant and machinery - which I have fully advised on - this is a very straight forward exit from the business with your assets.
Let me know if I can assist further = or it would be appreciated if you could rate the level of service I have provided.
I would always recommend asking a local (even one of the smaller independent) accountants to help you wind up the last year of trading to make sure all the is are dotted and the ts crossed ! Its money well spent to put all of these matters in order.
Thanks
Sam
Customer: replied 1 year ago.
The agency i have is from a uk importer of boats, to get the agency for SCOTLAND, i had to buy a boat and use it as a demonstration craft, giving me better sales and commission.
Land and garage/shed is near my home but not part of it, its boat storage land and small workshop.
thanks for the info,
AJ.
Expert:  Sam replied 1 year ago.
Hi
Thanks for your response
Then the boat would seem to be allowable although I imagine there would have been private use which would need to be taken into account along with consideration or capital allowances or balancing charges
And the land would need to be considered for capital gains when sold - if you did not sell - and retained them, then capital gains would have to be considered on you to transfer its ownership from the business to you as an individual
The capital gain would be formed on the he difference between purchase and transfer value.
Let me know if there is anything else -
Thanks
Sam
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