Tax treatment of lump sum in return for income stream? Tax treatment of income stream?
I have a UK client company which is to be paid £4300 a month for 97 months. The client wants to sell this income stream for an up front lump sum payment. This will be approximately £325,000, giving the person paying the lump sum a return of approximately 6% per annum gross.
Any ideas regarding the correct tax treatment? Does my client treat the lump sum as a trading receipt in year one (the monthly payments are being received under a contract for partnering support, which is part of the company's trade).
And what about the tax treatment for the individual receiving the income stream? The receipts of £4,300 will be part capital and part income - is there an HMRC formula to calculate the income element? Does tax have to be deducted at source on any element?
Thanks for any advice.
- Director selling assets to the company that were given to her 157 4
- Fees for Property Tax Return 556 18
- Revaluation of investment proeprty 138 2
- Subsistence expenses for one man band contractor companies 216 5
- How good is OCRREX Auto Rec software? 446 10
- Sage Line50 Journal Entry Help! 251 16
- Capital Gains Tax on title transfer 334 13
- Partnership issues and acting for one partner 48 1
- Can't read my handwriting 673 16
- Corp Tax Refund 208 3
- corp tax software 1,062 14
- How to prove to HMRC that you was not self employed? 401 13
- How can customer service quality vary between the basic pension firms? 436 6
- PRR 477 15
- Working from home - time apportionment 315 3
- Recovering VAT on property purchase 220 2
- cross border vat 120 2
- Any Scottish members out there? 12,964 488
- What code do you put expenses under such as tea & coffee? 810 17
- Now Scotland has voted "No", when does England get to vote? 1,680 74
- Raiders of the Lost Tax File 1,375
- Chartered Accountant in County Down N.Ireland 521
- National Insurance 421
- Non Resident 322
- Hands on experience of Digita 245
- Best way to take money from a business if you have unlimited EIS allowances? 233
- Employer's Helpline 189
- CIS paid under reg 9 189
- Does anyone use PS Financials accounting software out there? 153
- Commercial rental property - still Schedule A? 152