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S/Trader Selling - CGT, ER and Timing of Payments

What is deemed the date of disposal for CGT / Ent Relief - Timing of sale proceeds

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I have a self employed client who wishes to sell his business and has found a buyer who is willing to purchase.

Seller and buyer have agreed a price of £72,000 (£60,000 goodwill) but the payment for this business would be made as £12,000pa for 6 years. Legal issues aside, from a CGT perspective am I right in thinking that this would be deemed a disposal on day one of the buyer taking over and thus the whole sale amount assessed in year one even though payments will span many years.



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By mikeyban
08th Apr 2021 17:48

Hi ... yes it will be assessed on day 1 on the realistic consideration which will be received.

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By gainsborough
09th Apr 2021 07:05

I haven't got time at the moment to look this up, but worth a check of (I think) TCGA 1992 s280 re payment dates for tax where the consideration extends for a period over 18 months.

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