wwp8

this question is me asking for help from accountants.
if anyone don't want to give a sensible answer then please go away.

re:selling business

If i purchased a business a year ago for (eg) £100,000
and borrowed £50,000 (the other £50,000 was money from another business that was already been sold for deposit)

and want to sell it this year for (eg) £150,000
i know that unless i reinvest it in another business i will need to pay tax(40%) on PROFIT made on sale.
is the profit £150,000 minus £100,000 (original price) or minus £50,000 (borrowed price)
if it is the first one meaning £150,000 minus £100,000 the profit is £50,000 i know that I will get a tax free amount of £7750
and the rest £42250 will be subject to tax., UNLESS i reinvest it, can they reinvestment be other things ie. investment properties rather than businesses for myself?

also. from the £150,000
£50,000 is profit (SUBJECT TO TAX UNLESS REINVEST)
£50,000 is borrowed money (will be repaid back to bank
THE OTHER £50,000 (which was from ANOTHER business that was sold before)
what can i do with it,
is it
a, subject to tax unless reinvest,
b, known as tax free for myself.

thank you

scoobydooooo

i think you have up to a year to reinvest the profit , which is o i believe is what you would have to pay capital gains on . robbing *******s !!

wwp8

IS THERE ANY ACCOUNTANTS HERE?

anyone told me up to 3 years to reinvest
anyone help with...and want to sell it this year for (eg) £150,000
i know that unless i reinvest it in another business i will need to pay tax(40%) on PROFIT made on sale.
is the profit £150,000 minus £100,000 (original price) or minus £50,000 (borrowed price)
if it is the first one meaning £150,000 minus £100,000 the profit is £50,000 i know that I will get a tax free amount of £7750
and the rest £42250 will be subject to tax., UNLESS i reinvest it, can they reinvestment be other things ie. investment properties rather than businesses for myself?

also. from the £150,000
£50,000 is profit (SUBJECT TO TAX UNLESS REINVEST)
£50,000 is borrowed money (will be repaid back to bank
THE OTHER £50,000 (which was from ANOTHER business that was sold before)
what can i do with it,
is it
a, subject to tax unless reinvest,
b, known as tax free for myself.

beemerboy

lol

BB

beemerboy

you own a business and dont have an accountant??

good move!!! i'm impressed!!

BB

Badger Stuffer

I don't think this is the right place to seek financial advice.

If you REALLY do have £50K to invest I am sure that you would not take any advice from a BBS.

If however you would then here goes:

I am an accountant

I advise you to follow the example of the cabbie in todays Sun (Thats an accountancy journal) He (Under my advice) placed £23,000 on the gee gees (Another accountancy word) and won £217,000 so you could place your £50,000 *cough* using the very same system and I predict that you COULD win in excess of £500,000.

*Disclaimer*

I accept no responsability for you if you lose your £50,000 *cough* following this advice.



[Edited by Badger Stuffer - 7/22/2003 2:48:48 PM]

Mungo

You'd be better off looking at the Inland Revenue website, under re-investment relief, or talking to an accountant who specialises in these tax issues.

Not giving any advice whatsoever, seek independent financial advice, etc, etc. From your example you seem to be confusing the fact that the valuation of the business has increased by the same amount as the debt it has taken on. I'm assuming that this is purely coincidental. Therefore I believe you'd be liable to pay tax on the difference between the price you paid for the company and the price you're selling it for. There will be various reliefs available. Other than re-investment, e.g. there's retirement relief (if you're over 50 I think). You also get an annual allowance for Capital Gains Tax (CGT) which is around £7k I think, and I think you can bring last year's allowance forward if you didn't use it then.

wwp8

*sigh*
I DO have an accountant, just it is very difficult to get hold of him sometimes,
hoping on here any "accountants" could answer in their spare(and own )time
calling an "FA" and not paying for a service i think is rude.
i know the basics.
(CGT etc)
all figures are examples.

Mungo

I think the point being made was that this advice could save/cost you thousands, and you'd be better off taking professional advice rather than pub-style hearsay.