Normally any profit on selling will be subject to capital gains tax – the first £7,100 of gains each year will always be exempt.CGT is normally charged at your top rate of income tax, but this rate falls the longer you have had the business.
You can read more on capital gains tax on our sister website TaxGuide.co.uk.
All in the planning
Hugo Haddon-Grant is managing director of Cavendish Corporate Finance, which advises vendors. He says many owner-managers could benefit from better organisation and forethought. ‘Often an owner comes to us and says: “I’d like to sell this business yesterday.” That is often a mistake. If you plan a sale a year in advance, there’s a lot you can do to polish up and position a business in order to add value and make it easier to sell too,’ says Haddon-Grant.