Business Tax

[CJ29]

Hello! - I'm having difficulty with a piece of portfolio work I have been given which covers the capital gains <BR>arising from the transferral of a business from a father to a son. Does anyone have any tips on what I should<BR>be looking out for.<BR><BR>Many thanks for any help you can offer.<BR>

[bryan]

If the father is selling the assets to his son for OMV, then CGT is calculated as usual inc. base cost, IA, taper relief.<BR>If father is giving the business there are twi possibilities:<BR>1. Elect under S 165 TCGA 92 to hold over any gains, son gets business at father's original base cost<BR>2. Do not elect, in which case, because father and son are connected persons, the transactions are deemed to take place at OMV and gains calculted and relieved as if cash changed hands. This can be beneficial as it ensures that father's taper relief is not wasted, as it is if hold over relief is claimed.<BR><BR>Note that gains are calculated on an asset by asset basis and includes goodwill. The transfer of stock is a trading item and dealt with under Sch.D rules, there will be no CGT on it.