Sold shop business, will proceeds be taxable

[princess roxy]

Hi, my mum has just sold her shop business due to ill health. She sold it for roughly half what she paid for it 13 years ago. will she have to pay anything (capital gains etc)from what shes sold it for to the taxman. thank you, Roxy

[honeybee13]

Hello there.

 

I don't have any direct experience of this, but here's a link to the HMRC website with information and a capital gains tax calculator. Common sense would say that CGT is only payable when you make a gain, but I don't understand all the complexities of selling a business.

 

http://www.hmrc.gov.uk/cgt/businesses/

 

I think HMRC have a helpline for business tax, it might be worth giving them a call. Or another option would be for your mother to have a half hour initial interview with an accountant to be sure.

 

HB

[Andyorch]

Further information:-

 

http://www.hmrc.gov.uk/cgt/intro/when-to-pay.htm#1

 

As your mother made a loss I would think no...is she still paying Tax?

 

Regards

 

Andy

[princess roxy]

She does pay tax , but shes now on the sick having cancer treatment.

[Andyorch]

Okay well Capital Gains tax is due on the profit she made, not on the amount of money she received for the asset which was a loss anyway.

 

Andy

[drzac2003]

Hi, my mum has just sold her shop business due to ill health. She sold it for roughly half what she paid for it 13 years ago. will she have to pay anything (capital gains etc)from what shes sold it for to the taxman. thank you, Roxy

 

If she sold the shop as a going concern, then Entrepreneurs Relief will come into play - this allows for disposal of a business tax free up to £1m I believe - would be worth speaking to an accountant though. CGT probably wouldn't apply in this instance because you are not selling an asset (ie something that is tangible).