Capital Gains Tax or CGT is that tax that is paid on profits that are made when an asset is sold or disposed of. The gain is what is taxed and not the amount that has been received on the asset. CGT comes into play when assets like personal possessions worth around 6000 or above are sold. This would not include a car. Property that is apart from your main residence too would be considered and even the main residence if it has been let out, used for business purposes or is very large. For more details visit on :- https://doshiaccountants.co.uk/post/the-ultimate-guide-to-capital-gains-tax-for-business

1. The Ultimate Guide to Capital Gains Tax for Business
Capital Gains Tax or CGT is that tax that is paid on profits that are made when an asset is sold or
disposedof.The gainiswhat is taxed and not the amount that has been received on the asset. CGT
comes into play when assets like personal possessions worth around 6000 or above are sold. This
would not include a car. Property that is apart from your main residence too would be considered
and even the main residence if it has been let out, used for business purposes or is very large.
The same tax comes into play when you sell your business as well. Thus, looking to sell a business
does not merely involve making a good deal but also understanding the tax implications as well.
Otherwise,youmayendup paying an arm and leg in taxes that you could have easily minimised or
avoidedaltogether.Whenin doubt it is best to ask the experts to find out and so having a good tax
advisor is crucial.
How to determine the amount of Capital Gains Tax on the sale of your Business?
The amount of tax that is applicable on the sale of your business depends upon what type of
businessyouownedinthe first place, viz. whether it was a sole trader, the partner in a business or
the director of a company. When considering a company there is another aspect as well as the
amount of tax that has to be paid depends on what the business sale type is as where only shares
are inthe marketor assetsas well doesmake adifference.Due toall these intricaciesitmakessense
to getan accountant provide youwithtax services so that you do not make a decision out of lack of
knowledge.
Capital Gains Tax Applicable on Sale of Business by a Sole trader and Partner

2. When the business is being sold as a sole trader then the capital gains tax would be chargeable on
each assetof the businessatthe time of the sale. In the case of a partnership, you need to only pay
tax on your part of the share on the gains made on whatever assets are sold. Assets that are
chargeable include trade marks,patentsandthe premises of the business but cars and cash related
to the businessare exempt.If you do sell factory items or machinery at a higher then original price
then these too will be included in the taxable element.
These gains are only taxable however, if they are above the annual tax free allowance of 12,300. If
you are confused as to how much would be taxable then you should approach an Accounting and
Taxation expert like Doshi Accounting.
Whenit comesto companydirectorsthingsgeta little more complex as tax obligations would then
depend on if the sale is that of an asset or of a share. If it is a share sale then the profits that are
taxable wouldonlybe those of the shares.Butat the time of sellingassets the rules change and you
mightface a double tax charge which is why selling a business should not be done by yourself. You
should hire proper tax services.
Tax rates
The Capital GainsTax rate wouldbe at 10% if youfall withinthe basictax bracketbut wouldincrease
to 20% if you are falling in a higher tax band. Important to note here is that the rates would be
higher when one considers gain from specifically residential properties, up to 18% to 28%.
Due to the constant changesinthe tax ruleshavinga good tax advisor is of utmost importance. This
iswhere havinga good AccountingandTaxation firm like Doshi Accounting can ease the burden off
your shoulders.Contactuswithyourqueries,we are happytoassistyouwithour dedicated team of
accountants.