Capital gains tax

Capital gains tax

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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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By johngroganjga
25th Nov 2013 11:49

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. 

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By johngroganjga
25th Nov 2013 11:51

The tangible assets go wherever they belong.  If fixed assets - in fixed assets.  If cash - in cash etc...

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Replying to Mark Telford:
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By thomas
25th Nov 2013 13:03

Sorry, my question wasn't clear at all.  In the CGT comp, do I put in the goodwill value only and claim ER for that?  Or do I put in the total proceeds of £32,000 and somehow deduct the £1600 of fixed assets from somewhere to leave a gain of the goodwill value on which to claim ER?

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Euan's picture
By Euan MacLennan
25th Nov 2013 13:09

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.

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By thomas
25th Nov 2013 13:28

Thank you Euan.   Clearly

Thank you Euan.   Clearly obvious now you have told me.                                                               I have £800 of fixed assets bought in 2012/13 in the sole trade business that were sold to Ltd Co.  Do I actually need to claim AIA and then do a balancing charge?  The balance (also £800) relates to small  items which were expensed in previous years.  How do I treat those items?

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Stepurhan
By stepurhan
25th Nov 2013 13:36

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.

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