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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16045
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have sold my small business for £68,000, by the time I

Customer Question

I have sold my small business for £68,000, by the time I have paid off all business debts I will be left with about £20000. It is tea room , they have just bought the lease and the assets and goodwill , but not the limited company which traded as the tea room. I owned 75% of the shares. Will I have to pay tax on this??
Submitted: 2 months ago.
Category: Tax
Expert:  TonyTax replied 2 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 2 months ago.

Did you or the company own the lease, the assets and the goodwill?

Customer: replied 2 months ago.
The company owned them all.
Expert:  TonyTax replied 2 months ago.

Thanks.

Leave this with me while I draft my answer.

Expert:  TonyTax replied 2 months ago.

The company almost certainly won't have made a profit on the disposal of the lease and assets but may have made a gain on the disposal of the goodwill.

You need to split the disposal proceeds between the three components. To arrive at the gain on the goodwill, you need to deduct what you paid for it originally which will have been nothing if you set the company up from scratch. The gain will be taxed at the corporation tax rate of 19%. If you have written off the cost of the goodwill against company profits then you wll have a 100% goodwill gain.

I hope this helps but let me know if you have any further questions.

Expert:  TonyTax replied 1 month ago.

Hi.

I'm just following up to find out if my answer helped or if you have any further questions.