Capital Gains

It is often wrongly assumed that Capital Gains Tax (CGT) is due on the whole amount that you receive on selling something – a business asset for example. This, however, is not true. You are liable for CGT only on the profit that you make following that sale. ‘Disposing’ of an asset is treated in the same way as selling it in the case of a business asset being destroyed by fire. In this case you would very likely receive an insurance pay out or compensation. CGT may be due on this.

To guide you through the minefield of CGT it’s always a good idea to seek the help of tax experts. Pros Assist will gladly help you with this and will ensure that you do not pay too much CGT. Profits are often made on the disposal of business assets such as shares, land and buildings or the fixtures and fittings of your premises. Goodwill is also treated as an asset and quantifying the profit made on that would certainly need some expert advice.

In basic terms CGT might be due on profits gained from asset disposal if yours is a small, owner-operator kind of business or one with a small number of partners involved. Larger companies, such as those with Limited Liability, would usually pay the tax on such profits through their Corporation Tax bill.

An advisor will stress that any asset disposal needs to be carefully assessed. Losses should be deducted from gains but then a tax-free allowance (known as Annual Exempt Amount) is applied before calculating the final CGT that is due. Those who submit Self-Assessment tax returns can certainly include CGT within this although the CGT information forms a separate Capital Gains Tax summary (form SA108), this being in addition to the basic form SA100.

Finally, in addition to that mentioned above, you should be aware that a small business owner (an entrepreneur or partner, for example) is entitled to claim the following types of tax relief on the disposal of business assets:
Entrepreneurs’ Relief
Business Asset Roll-Over Relief
Incorporation Relief
Gift Hold-Over Relief

Those in doubt about their eligibility for such awards should seek help from Pros Assist and basic guidance is, of course, available on the HMRC website at