One of my clients (a sole trader) runs a cafe but has decided to sell up due to illness. Am I right in understanding that I treat the sale as a CGT item thus claimiing The ~£10k relief? It has been sold for less than this so I assume there will be no tax on the sale?
Yes, the sale of the business is a capital gain. And yes, your client gets an annual exempt amount of £10,600 (for 2012-13). As long as the sale is not being made to a 'connected' person AND there are no further CGT items in the fiscal year, if the sales proceeds are less than the exempt amount then no CGT is payable.
Would you not allocate the sale proceeds to what is being sold eg so much to stock, so much to fixed assets which would be taxed under income tax rules and the remainder treated as goodwill and taxed up capital gains rules?
