One of my clients has just sold her small cafe business due to ill health. I am completing her sa but am a little bit stumped on capital gains.
The cafe is a rented lock up previously closed but kitted out by the landlord, so effectively she was ready to trade from day 1.
She has sold the business for £3000 which includes £1200 for van, £300 for food still in the premises, and £500 for kitchen equipment previously purchased and all bar £100 offset last years tax return.
I understand this results in a net capital gain of £1000 which can be claimed under entrepreneur relief but I am a little confused how this should be presented on the sa. The way I have done it is by stating £1000 as capital gain with no losses and providing a pdf as attached. I have a nagging feeling I maybe should be doing it as £3000 capital gain with £2000 losses but instinct tells me there are no losses as there were no real start up costs.
As I am not familiar with capital gains I don't want to mess up the sa, so help would be appreciated before I fully submit it.
-- Edited by Don Tax on Wednesday 22nd of May 2013 11:47:02 AM
Hi Tim
Yes, I understand that, but should I be showing on the self assessment £3000 capital gain with £2000 losses or £1000 capital gain with no losses (see my attachment) or doesn't it matter either way?
The £2000 is acquisition costs rather than losses and are accounted for before you reach the SA pages. ie. the gain.
Entrepreneurs relief is derived from accumulated trading losses which can be set off against CGT upon disposal, cessation or retirement from a business.
By the way, there's nothing to stop you attaching your computations to the Return or entering them in the white space. I know I've wanted to in the past even just so that I've had a convenient note of what transpired and when.
The £2000 is acquisition costs rather than losses and are accounted for before you reach the SA pages. ie. the gain.
Entrepreneurs relief is derived from accumulated trading losses which can be set off against CGT upon disposal, cessation or retirement from a business.
best regards,
Tim
Hi Tim.
It's how i originally thought, but then I panicked a little I think, so just wanted to query it.
Many thanks for your help, I will be including the attachment as you suggest.
