Sale proceeds of business in 2 instalments

Business sale proceeds over 2 tax years

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A business owner sells their business and the consideration is to be received in 2 instalments over 2 tax years. The sale qualifies for ER. The 2nd instalment will be paid 12 months after the 1st instalment. The reason why it is split into 2 payments is purely for the buyer's cash flow purposes and not linked to performance of the business following the sale. Therefore does the whole of the sale proceeds have to be shown in the tax return year of the 1st instalment date or can the proceeds be shown over two tax years which then would utilise two CGT exemptions?


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By Michael Beaver
21st Jun 2016 09:59

Yes, it should all go in the first year.

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By Tim Vane
21st Jun 2016 10:09

It's one sale, in the first year.

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By TheLambtonWorm
21st Jun 2016 10:46

It'll all go in the tax year in which the sale contract went through. Presumably this will happen in the same tax year that the first instalment is paid.

It's deferred consideration.

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By Robert Lovell
05th Jul 2016 15:20

Giles Mooney and Tim Good tackle this question in the latest episode of 'Any Answers Answered'.
Check out the video here:

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