Selling a site and Tax (UK only)

[flipfilter]

I came across this discussion on Wicked Fire

http://www.wickedfire.com/shooting-s...yers-only.html

I'm a little naive when it comes to Tax law so I dont know how factually correct some of the stuff being discussed is, but it's interesting (as interesting as tax can be )

[ScottJ]

Yep the entrepreneur relief @10% does exist along with your personal gain allowance of around £10100 per year, you do need to close a business and sell of the assets or sell it it a substantial part to go for the 10%, I know of a few people taking advantage of it, a good tool to have if you sell up big time.

[flipfilter]

I think the 'substantial part of it' is the interesting bit.

We've (not me ... just hypothetical people incase inland revenue agents are monitoring this forum...) always taken advantage of the UK govt's naivety on e-businesses to find loopholes but this seems like it could be the mother of all grey areas!

[Clinton]

From an accountant's site:

The relief is intended to meet the needs of those disposing of businesses, and not those merely selling assets so the qualification is that the trader either sells the whole business, or a distinct part of the business as a going concern, or ceases trading completely, or in one particular aspect of his business activities and sells the assets relating to that.

In considering whether a particular business activity has separable parts, it is likely that HMRC will use test cases under an old relief known as retirement relief. Although this relief was withdrawn a few years ago, the new relief is very closely modelled on the terms of retirement relief, so the old cases will very likely be a good place to start.

In the eventuality of a HMRC investigation wouldn't you be on sticky ground if, for example, you didn't pass on your affiliate account/Adsense account/Paypal account etc., with the business and they argued that you were simply disposing of assets?

[flipfilter]

From an accountant's site:
In the eventuality of a HMRC investigation wouldn't you be on sticky ground if, for example, you didn't pass on your affiliate account/Adsense account/Paypal account etc., with the business and they argued that you were simply disposing of assets?

With all respect to HMRC I doubt they would be smart enough to make that argument.

A friend of mine had a property leads business in 2007 and he eventually went into bankruptcy. The official receiver was told to collect the businesses assets as he was a sole trader. Apparently, when he listed all of his domains (bearing in mind this was an internet business) he was told that they're not really concerned with those and he could keep them ... what they wanted was the phone numbers and the domain which the email belonged to so he couldnt keep trading!!

[Clinton]

One tip if you're selling a company together with the site:

Give yourself a contract of employment that grants you £30K in redundancy if you're ever sacked. When you sell the company and they "sack" you, they'll have to pay £30K which, as it's redundancy money, is tax free. You can then lower your selling price to make it a better deal for the buyer (speak to an accountant for the best way to do this so HMRC can't argue that the redundancy was part purchase price)

[deeman]

From an accountant's site:



In the eventuality of a HMRC investigation wouldn't you be on sticky ground if, for example, you didn't pass on your affiliate account/Adsense account/Paypal account etc., with the business and they argued that you were simply disposing of assets?

One way of doing it, if the sale is big enough (big enough is quite key here) is to have the website owned by a separate limited company then sell the shares of the company rather than just the site. That way all aff accounts etc will also pass over. Obviously quite a lot more admin involved and the sales process gets more complicated but could be worthwhile if the saving is £xx,xxx or higher