If you are selling the assets of your business (asset sale), you might find yourself subject to a double tax charge. Here, you might have to pay corporation tax on the gains arising from the sale (at the rate of 19%) and capital gains tax (of at least 10%) after the extraction of the sale proceeds from the company.
How does selling an asset affect your business tax?
Asset Sales Will Affect Your Business Tax When you sell a business asset, you will either sell it for a profit and incur a capital gain, or sell it for less and incur a capital loss. How this effects your business tax is directly related to how long you owned the asset before the sale.
How can I Sell my Business without paying taxes?
Sell your business on ExitAdviser, an all-inclusive selling platform for small business owners. Most sellers make the mistake of not consulting with a tax advisor prior to the sale of their business entity, shares, or assets. Because of this, they could end up paying more taxes than they expected to when Tax Day comes around in April.
Do you need to do tax planning when selling your business?
You’re fooling yourself if you think you can manage tax planning on your own. With a significant portion of sale proceeds on the line, the decision to consult a tax professional before the sale should be a no-brainer. There are several things to consider as you develop a tax planning strategy with your accountant or lawyer: 1.
When do you have to pay corporation tax on sale of assets?
If your company ceases trading and you sell its assets separately for their market value (for example plant, machinery, vehicles, computers, customer list) your company will be liable to pay Corporation Tax on any chargeable gains and other profits on the disposal of these assets.
Do you pay capital gains tax on the sale of a company?
As an individual shareholder you will be liable for Capital Gains Tax on the sale or disposal of your shares in your company. You’ll pay Capital Gains Tax on any increase in value of the shares over and above the value when you got them net of, for example, any relevant Business Asset Taper Relief or other reliefs.
