ENTREPENEUR RELIF PAY FOR ANSWER

Entrepeneur Relief, Balancing Charge, Lease Premium

Didn't find your answer?

Question and don’t mind paying for some precise guidance to complete Tax Return.

Entrepeneur Relief, Balancing Charge, Lease Premium?

Client had been trading for many years in a shop selling clothing.  Landlord also owned café next door, she took this on without lease premium or any payments made whatsoever, ran alongside her existing business, all through one account as a sole trader.  Having now sold remaining 4 years of lease, continuing just again with clothing shop.

Question 1 ::: Does entrepreneur relief apply.  I think it is a distinct not part disposal therefore achievable, but not well read in subject.

 

If ER does apply, then to what

 

Question 2 ::: Sales proceeds £70,000 which solicitors split as

 

Goodwill                              £35

Lease                                    £17.5

Fixtures & Fittings            £17.5

 

I spoke with HMRC Inspector and recorded UTR in conversation, was advised my initial thoughts were incorrect, which were

 

Goodwill would be subject to ER (if qualifying)

Lease, this would be property rental income under the equation  years minus 1, x2% etc

Applying a balancing charge in tax comps for fixtures and fittings

 

Also, if not all ER, should disposal costs be split proportional

 

 

Was advised the entire amount subject to ER.  This does not make sense to me.  I need to have this Tax Return completed next week, don’t mind paying a sensible charge for final assistance.  I have undertaken some further reading this weekend, perhaps it is that the Capital Gain is anything in excess of the assets purchased (coffee machine, counter, and stock).  That I should consider a balancing charge being amount of assets claimed in tax comps to date, but no greater than cost, the balance, and, indeed lease, all subject to ER if it applies.

 

I simply dont have enough time to research this with other commitments and therefore would prefer to settle the reasonable charges of someone that will assist me to confirm the precise Tax Return entries

 

Look forward to some answers

 

 

Replies (1)

Please login or register to join the discussion.

By johngroganjga
18th Nov 2017 12:35

But nobody with a proposal to put to you can do so, can they? You have posted anonymously.

Thanks (1)