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MyVirtualCPA
MyVirtualCPA, Accountant
Category: Tax
Satisfied Customers: 16580
Experience:  CPA with Master's degree in accounting
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In 2013 I embarked on a business project paying 15K fuxtures

Customer Question

In 2013 I embarked on a business project paying 15K fuxtures & fittings and 5K goodwill (total 20K) plus a rent deposit of 12.5K. The business lost money continuely till April 2015 when I closed it surrendering the leases and fixtures & fittings back to the landlord for a surrender premium of 50K plus the 12.5K rent deposit.I understand that any surrender premium can't be claimed as a capital loss only trading. I raised the the required capital to surrender the lease by selling a BTL property with a 30k capital gain before the annual allowance.
Can the purchase of the business be a 20K capital loss ? I have not written down any f&f allowances
Submitted: 1 year ago.
Category: Tax
Expert:  MyVirtualCPA replied 1 year ago.
whenever you lose money investing in a business venture, you can deduct your loss upon ridding yourself of the investment. Provided you have nothing left of the business you can deduct the loss of f&f. If you sell them, deduct the allowance from the proceeds before taking the deduction. Please let me know if you need anything additional. If not please rate positive.
Customer: replied 1 year ago.
Ok so the full 15k can be deducted from my capital gains bill it is on the purchase contract but not on the surrender one, will HMRC question if I gave it away ? what about the 5k goodwill ?
The 50k surrender premium and 12.5k rent deposit in P/L account.
Is that correct.
Expert:  MyVirtualCPA replied 1 year ago.

Yes, if you gave it away it would be questioned. Goodwill is not deductible. And yes, you are correct. Please let me now if you need anything additional. If not, please rate postivie.

Customer: replied 1 year ago.
In your option what cause of action would you take with the fixture & fittings claim the full 15k and hope for the best or reduce it ?
How meany years can you carry over a lose last tax year will be about 65K plus I'm carrying forwarded 45K from the previous two years.
Expert:  MyVirtualCPA replied 1 year ago.

You're asking a new question beyond the scope of the original one. Please rate and then post a new question.

Customer: replied 1 year ago.
Well I think it's basically that same subject but have adjusted my question...
In your option what cause of action would you take with the fixture & fittings claim the full 15k and hope for the best or reduce it ?
Expert:  MyVirtualCPA replied 1 year ago.

Claim the full 15K and hope for the best

Please rate so that I may be compensated.

Thanks

Customer: replied 1 year ago.
I am of the option that this question is related...
How meany years can you carry over a lose last tax year will be about 65K plus I'm carrying forwarded 45K from the previous two years.
Expert:  MyVirtualCPA replied 1 year ago.

This is beyond the scope -- please rate so that I may be compensated for my work thus far. It may be "related" but it's not of the essence of the first question.