CGT - When is the CGT date for deferred proceeds

CGT - When is the CGT date for deferred proceeds

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Client partnership is selling their business to a relative. Part of the disposal proceeds are to be settled in a loose arrangement in terms of when the new owner can afford to pay.

Will the total agreed proceeds be a CGT disposal at the date of takeover or can the deferred parts be CGT disposals in their own right.at later times and tax years?

There is no acquisition costs so no apportionment

Thank you
Stephen Payne

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By Paul Soper
28th Mar 2008 17:35

Contact and instalments not the same
The contract will become effective from a CGT perspective when a genuine condition is satisfied but that will not defer the liability on instalments of the consideration.

If the consideration is uncertain the future consideration should be estimated, brought into account immediately, but adjusted on a subsequent claim when known. There used to be a provision pre self assessment permitting payment by instalments where there was hardship, quite attractive because it only charged interest from the date of each instalment but these days the instalments provisions of self assessment are used instead which do charge interest from the original due date.

Follow this for more details http://www.hmrc.gov.uk/manuals/CG1manual/cg14850+.htm

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