My cliet sold her sole trade business to her Ltd Co
Consideration £32,000
Tangible assets £1600
Goodwill £30,400
When Im completing the CGT pages and claiming ER:
Can I put through any accounting fees as 'associated costs of disposal'?
Where do the tangible assets go? (improvement costs?)
Many thanks
Replies (6)
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If they were costs of disposal yes of course. But how were they? You don't explain and it does not seem to me that is self-evident.
The tangible assets go wherever they belong. If fixed assets - in fixed assets. If cash - in cash etc...
Only the goodwill - probably!
If the fixed assets were plant & machinery on which capital allowances had been claimed, you would include the £1,600 as disposal proceeds in the final capital allowances computation for the sole trader, which would probably result in a balancing charge on which she would be liable to pay income tax.
AIA not compulsory
You don't have to claim AIA at all. Assuming that the assets were purchased so close to the change that they are unlikely to have gone down in value, they can simply be transferred at no gain/no loss. This is likely to be the easiest answer, especially considering the fairly small sums involved.
The £800 for items previously expensed can be put through as a trading receipt. Essentially it is like a reversal of the expense recorded in previous years. £800 seems moderately large for small non-capital items to be carried over, but I presume you have a basis for this value.