I have a client who is a Partnership, they have sold the business and Premises as a going concern and have made a loss based on book values.
If I treat this as a Capital Gains transaction the loss cannot be offset against prior years trading profits. Can I treat the sale as part of the closing of the business and count all losses against the trading and create a loss which can be offset against prior years trading?
Also if already submitted to HMRC as a Capital Gains transaction can this be amended?
Related resources
Replies (1)
Please login or register to join the discussion.
It's a question of fact
The sale contract should have included an apportionment of the sale price between the various constituent parts (ie goodwill, property, equipment, stock etc.
Once you have that apportionment the tax treatment of each element then just follows.
If there is no apportionment in the contract (highly unlikely where a property is being sold) then you have to apply a "just and reasonable" apportionment and see wheer that gets you to.