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bigduckontax, Accountant
Category: Tax
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What is the tax position of the following : Lease of pub

Customer Question

What is the tax position of the following :
Lease of pub acquired 2003 £12,200
Surrendered to brewery 2014 £45,000
Gain £32,800
Is this a taxable capital gain
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Yes it is a taxable gain of 32.8K taxable at 18% or 28% or a combination of the two rates depending on your income including the gain in the year of sale. Remember you have an Annual Exempt Amount (AEA) of 11.1K to offset this gain so a worst case scenario is a tax bill of 32.8K = 11.1K = 21.7K @ 28% = 6076 quid. However, if you went out of the pub business altogether on sale you would be entitled to Entrepreneurs' Relief which limits the tax to a flat rate 10% on the gain [GBP 2170].. If you are continuing in the licenced trade then providing you reinvest the gain within two years Rollover Relief applies, but this just postpones the gain to some indefinite future date. I do hope that you find my reply of assistance.