Stupid question alert - I'm not clear what I need to do next.
Small sole trade business incorporated on 15/04/13.
On 15/04/13;
Fixed assets & Prepayments £1,600
Liabilities - £3,000
Goodwill £16,000 ( On GRF basis x 1)
Total consideration £14,600
I confusing myself with the liabilities. Is it the £16k goodwill I need to pay CGT on or the net assets transferred?
Replies (6)
Please login or register to join the discussion.
Goodwill on incorporation
Hi
Nearly 150 views and no comments, Aweb often surprises me!
There are two ways upon incorporation, you appear to be taking the Credit Goodwill & pay CGT - which is uaually great, can your client apply ER?
The value that your client is benefiting from is the £16k, that's your own valuation I expect; less CGT allowance, CGT at 10% due to ER applying.
Watch my simplistic & non-technical, first, response be shot down now :-)
The CGT figure is the goodwill sale proceeds of £16,000. The £14 600 is irrelevant for tax purposes.
I wouldn't say the £14.6k is totally irrelevant
The part of it relating to fixed assets may be relevant for tax purposes.
Yes the sale proceeds of fixed assets will feature in capital allowances calculations. By "tax" i meant the CGT calculation the the question was about.
And just to be picky
theoretically, but unlikely, the sale proceeds of the fixed assets could be subject to CGT too, i.e. to the extent that they exceed their acquisition value and are not covered by any other exemption (chattels).
Started something...
As predicted!
I love the intellectual posturing on here.
Cgt on £16k and maybe fixed assets, less annual allowance. ER may apply.
Capital allowance on fixed assets calcs too
Everyone good with that?
Have a great weekend