Hope you can help with this brain teaser.
Client sold entire shareholding in trading business (qualifies for entrepreneur relief) in 2016/17 tax year.
Total sale price payable as follows:-
First instalment June 2016 - approx 40%
Second instalment after 12 months - approx 20%
Third instalment after 18 months - approx 15%
Fourth instalment after 24 months - approx 25%
Purchaser is now disputung contact (under due diligence and not contingent on business performance) and client has only received first instalment - there is an ongoing court case regarding the settlement of the outstanding amounts and this is unlikely to be concluded for several months.
What do we put on 2016/17 Tax Return for Capital Gains?
Do we put in provisional figures based on First instalment received only and disclose this in additional information?
Do we put in full disposal and disclose that this may not be received.
Lawyers unwilling to give probability of outcome of court case.
What about costs in relation to this debt? (Client hoping to recover these but may not recover in full)
Do these get factored into Capital Gain?
Or can tax relief be obtained in another way?
Appreciate this is a busy time or everybody but looking for someone who may have experienced this before and can give me some pointers.
Any input would be greatly appreciated.