I am a bookkeeper for a limited company. The owner is looking to sell up. My query concerns how to calculate the gain from the sale - specifically the original costs.
Some 5 years back the owner (then operating as a sole trader) incorporated the limited company, transferring to it the assets and liabilities of the sole trade including a large value of Goodwill.
Is this goodwill (or its current written down value) a 'cost' to be deducted from the sale price when determining any gain on sale - indeed what are the costs to be applied ?
I've searched the internet and cannot find any detailed 'how to do it' instructions.
So, if you can either answer my query or point me in the direction where I might find out for myself, I'd be much obliged.
Wow, they all do come back on eventually don't they!!!
Does your PII cover this? I would suggest this is way outside your 'bookkeeping' scope and is where they need to get some proper advice as the one main area that they should be concerned about you don't even mention. The Accountants is the only direction you should be looking in, I'm afraid.
I am a bookkeeper for a limited company. The owner is looking to sell up. My query concerns how to calculate the gain from the sale - specifically the original costs.
Some 5 years back the owner (then operating as a sole trader) incorporated the limited company, transferring to it the assets and liabilities of the sole trade including a large value of Goodwill.
Is this goodwill (or its current written down value) a 'cost' to be deducted from the sale price when determining any gain on sale - indeed what are the costs to be applied ?
I've searched the internet and cannot find any detailed 'how to do it' instructions.
So, if you can either answer my query or point me in the direction where I might find out for myself, I'd be much obliged.
Thanks
Wouldve been good if the respondents on here had received a 'thank you' to any of your 2019 posts as that would be all the encouragement most folk need to respond in a helpful manner.
Good advice though from Caron. If you really consider your PII to be sufficient, you should still look to buy in some tax advice given your inherent lack of knowledge.
The problem you also have is that the owner is 'looking to sell', so currently you have no idea what he will actually be able to sell. He may want to sell the whole lot but only get a buyer for some of the assets. So how long is a piece of string.
You could be doing yourself out of a whole pile of tax by not getting the correct advice, which can take into account personal circumstances as well as different scenarios of any potential deal.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
