Sale of business #2

[cassie]

May I rephrase the question I asked yesterday:

My husband has a business which he is selling. We have operated to all intents and purposes as partners in the business with me helping a lot including doing all the accounts etc. The business bank account is in his name.

Can we use both of our CGT allowances when we sell the business?

Thanks.

cassie

[Huw Williams]

Nigel has already answered your first question.

I am not sure what you are implying by posting a second question. Although you may have acted to "all intents and purposes as partners" how have you told the world you act by such things as the letterhead and the tax returns you have completed. Your previous question suggests this has indicated it was your husband's sole trade.

If so you need to follow Nigel's advice.

But I wonder whether you have looked at the tax position fully. When a sole trader sells up there are a number of assets involved in the business and most (such as plant and equipment, work in progress and stock) do not involve capital gains tax. Depending on the price paid and how much is for what assets there may not be a capital gain at all.

There are other taxes to worry about, such as income tax and stamp duty (and possibly even inheritance tax) and I would suggest that you take advice.

Please feel free to contact me for more help.


Huw Williams
enquiries@huwwilliams.co.uk

[cassie]

Huw, all I implied by posting again was that I was confused - I'm sorry if I offended anyone, I didn't mean to.

Thank you for that snippet about the full sale price of a business not necessarily being all capital gains.

For anyone in a similar situation that may be reading this thread, this is what I have found out so far:
1. If you go into partnership, you need to lodge three tax returns - one for each partner and one for the partnership itself.
2. The partnership must have a separate tax reference number than the partners, and in order to get one you need to register the partnership with the local tax office. At what point this must be done I don't know, nor whether you need to give them a copy of your partnership agreement.