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Where Taxpayers and Advisers Meet

Sole Trader - Sale of assets

Shippy92
Posts:4
Joined:Tue Apr 16, 2019 11:20 pm
Sole Trader - Sale of assets

Postby Shippy92 » Sun Jan 19, 2020 8:55 pm

I am currently a freelance photographer (sole trader) in my spare time and I am looking at winding down and selling my equipment.

However, I am unsure about how to go about this and have read about capital gains and think I have confused myself!

I have only ever used the cash basis method and have never claimed any depriciation on any of my equipment. What is the correct way of recording the sales of my equipment as and when I do sell them. They are worth alot less now than when I purchased them so can't assume there would be any capital gains tax to pay? So confused!

pawncob
Posts:5089
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Sole Trader - Sale of assets

Postby pawncob » Mon Jan 20, 2020 5:24 pm

If you've claimed Capital allowances on your gear, when you sell it the sale proceeds in excess of the written down value are taxable.
Have you charged the cost of the gear against your profit in the past? If so the sale proceeds are taxable and form part of your profit. If you haven't charged the purchase in your accounts then the sale proceeds aren't taxable. Capital gains tax does not apply.
With a pinch of salt take what I say, but don't exceed your RDA

Shippy92
Posts:4
Joined:Tue Apr 16, 2019 11:20 pm

Re: Sole Trader - Sale of assets

Postby Shippy92 » Mon Jan 27, 2020 1:39 am

If you've claimed Capital allowances on your gear, when you sell it the sale proceeds in excess of the written down value are taxable.
Have you charged the cost of the gear against your profit in the past? If so the sale proceeds are taxable and form part of your profit. If you haven't charged the purchase in your accounts then the sale proceeds aren't taxable. Capital gains tax does not apply.
Thank you - when I purchased the equipment in the past I claimed the full amount as an expense for that tax year. Assume I just show the incoming payment on my accounts and show it as profits then?


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