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capital gains on sale of share

when is the capital gain taxable? on the agreed sale or when the money is received??

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shares in a limited company have been sold to another company and the agreed sale was 31/1/18 and most of the money was paid to the shareholders before 5/4/18 but some of the money wasnt paid until after 6/4/18 so can we calcuate the cgt on the first lot of money in the tax year 17/18 and then do another calcuation for the 18/19 - so we get the allowance in each year??? or do we put it all onto the 17/18 tax return 

 

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By johngroganjga
03rd Jul 2018 18:09

What was the reason for the payment being made in two instalments?

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By Accountant A
03rd Jul 2018 18:11

What did the sale contract say about payment by instalments?

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By sarahtaylor2018
03rd Jul 2018 18:23

I will find out but it will be tomorrow now as apparently there is a game on and non of the directors will answer their emails - thanks

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By May bee
04th Jul 2018 08:30

My more knowledgeable colleagues will confirm, but my understanding is that if payment is delayed as it has been agreed that the contract will be settled in installments, then the whole gain occurs in 17/18.
If however loan notes have been issued and this is the reason that some of the payment wasn't received in 17/18 (as the loan notes are settled in 18/19) then possibly some of the gain arises in 18/19. This will depend on whether they've elected to treat the gain as occurring on the sale of share/issue of the loan notes (often the case if looking to preserve access to Entrepreneur relief).

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By sarahtaylor2018
04th Jul 2018 09:47

The payments were staged as part of the deal.

The larger sum on completion with £250,000 retained whilst we assisted with the 3 month handover.

The £250k retention should have been paid to us in one payment but there was a concern a possible bad debt may exist so they withheld part of this circa £29,000.

When I confirmed the debt was safe they released withheld money to complete the full transaction.

this is what the director has sent me - I have the feeling I should put all the gain into the 17/18

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By Martin B
04th Jul 2018 09:58

Retention is quite normal and only a three month wait. My view is the whole amount needs to be reflected in 17/18. Wait until the bad debt issue has been resolved so that you have the actual consideration received.

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