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Where Taxpayers and Advisers Meet

Rolled-over earnings?

Troubleandstrife
Posts:1
Joined:Mon Sep 24, 2018 11:13 am
Rolled-over earnings?

Postby Troubleandstrife » Mon Sep 24, 2018 11:26 am

I am employed full-time, a high-rate taxpayer and income tax is deducted at source.
I do occasional freelance work on top of my FTE and file these on my self-assessment form.

But I need advice on what to do about a job I did that is about to pay out:
Five years ago I did a considerable amount of freelance work on a start-up app. I was not paid at the time (as the start-up wasn't making money then anyway) but signed a contract that would give me a % of equity. I continued to do occasional work for the app over the years.
The app founders are about to sell it, and realise a reasonable sum, a % of which will be paid to me.
How do I treat this on my self-assessment form? Will HMRC spread the gains over five years or treat it as a one-off sum in a single tax year?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Rolled-over earnings?

Postby bd6759 » Tue Sep 25, 2018 11:04 pm

I'd have a tax expert look over the contract to determine if the gain will be subject to income tax or capital gains tax.

Whichever, it will taxable in the year of receipt.


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