Would appreciate if someone could provide clarification on one aspect of Capital Gains Tax (CGT). I'm able to calculate the CGT of assets for personal use (including the calculation of indexation and taper relief), but am having difficulty determining what items could be classed as busines assets.
If i understand CGT correctly then a limited liability company does not have a "personal allowance" of £8,800. At what stage then does a business (limited liability) become liable to pay CGT and who would be accountable for payment?
I can understand someone working as a Sole Trader who has a direct interest in the busines being liable but what if an individual had set up a small company, would they not just be liable for corporation tax on profits?
What would happen if someone were to turn a small corporation into a huge multinational and sell the firm as a going concern (say for millions of pounds)- would this be considered a CGT liability?
This query has arisen from a question in a mock exam paper which asked the following question:
A CGT liability could arise in which of the following circumstances:
A -- A corporation that has just been sold
B--Retirement of a Sole Trader
Correct answer is B- I can understand why but can't understand why A wouldn't incur a CGT liability if the corporation had been sold by its original owner for far more than it had been set up for.
I guess what i'm trying to get at is when does a company pay CGT rather than pay corporation tax (and vice versa).
Thx in advance,
Mik
If i understand CGT correctly then a limited liability company does not have a "personal allowance" of £8,800. At what stage then does a business (limited liability) become liable to pay CGT and who would be accountable for payment?
I can understand someone working as a Sole Trader who has a direct interest in the busines being liable but what if an individual had set up a small company, would they not just be liable for corporation tax on profits?
What would happen if someone were to turn a small corporation into a huge multinational and sell the firm as a going concern (say for millions of pounds)- would this be considered a CGT liability?
This query has arisen from a question in a mock exam paper which asked the following question:
A CGT liability could arise in which of the following circumstances:
A -- A corporation that has just been sold
B--Retirement of a Sole Trader
Correct answer is B- I can understand why but can't understand why A wouldn't incur a CGT liability if the corporation had been sold by its original owner for far more than it had been set up for.
I guess what i'm trying to get at is when does a company pay CGT rather than pay corporation tax (and vice versa).
Thx in advance,
Mik
