How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4807
Type Your Tax Question Here...
bigduckontax is online now

Calculation of gain relief when business is sold partially

This answer was rated:

Calculation of gain for enterprise relief when business is sold partially on earn out

Hello, I am Keith, one of the experts on Just Answer, and pleased to be bale to help you with your question.

Could you please expand a tad on your question? Normally it is the net gain which would be exposed to Capital Gains Tax (CGT) on disposal.

Customer: replied 1 year ago.
I will be paid 50% on signing to deal 25% in 12 months and a further 25 % in 24 months subject to certain earnings targets being met. When do I incur the c g t liability as gain will be 250/- 125/- and 125/- +|_ and amount of last tranche is uncertain?

As a general rule the gain is calculated and taxed on the whole transaction as at the first date of sale. Thus you pay CGT in advance of some receipts. In the event of a shortfall in the sales receipts you can apply to HMRC for a refund.

However, you can apply to HMRC for the gain to be treated in installments, but the period of such installments may not exceed eight years.

bigduckontax and other Tax Specialists are ready to help you

Thank you for your excellent support.