Sale of sole trader business - accounting and taxation treatment?
I have a client who sold the trade and assets of their sole trader business in November 2011. I have prepared the accounts to 30 November 2011. I understand that I include the loss to that date in her self assessment tax return and that the capital gain on the sale of the business is eligible for Entrepeneurs Relief.
My question is how to calculate the gain. I have the sale proceeds less associated cost os disposal. The proceeds have been allocated against goodwill and assets as per the solicitor (I was not the accountant at the time). Is the base cost the net book value of goodwill and assets in the balance sheet? Or the original cost? Or some other figure?
Any help would be appreciated.