A sole trader started business in catering trade on 14 March 2001 having bought a lease for £9,000. He traded for a few months until 5 September 2001 and sold the lease for £30,000. In between the above period, he bought another lease for £16,000 in another part of the country running a similar business in MAy 2001 and commenced trading in his second shop.
What is the best period of account(s) in respect of the first and second business taking into account the acqusition and disposal of the leases.
What about the 2001 tax return. Surely, it is not practical to prepare half a month's account to 5 April 2001 just to avoid the overlap profit, if any.
Can someone advise please.
Simon
Replies (2)
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Revenue challenge
Simon
You can only roll over the full gain if all the £30,000 proceeds are re-invested in either permanent assets (ie freehold property) depreciating assets (ie another short - less than 60 year - lease). The time limit is 12 months before and 36 months after the original disposal. TCGA s152 to s156 apply.
You say that the businesses were similar not the same. You may be able to persuade the Inspector to treat both business as the same trade, but given that the two were in different locations you could encounter problems. Given the short period of the "first" business it is worth trying to pull the two together.
Without detailed knowledge of your clients two businesses it is difficult to give specific advice.
Good luck
Jacqui