Tax return capital gains question...

[emsyj]

I'm finishing off my tax return (last minute as always) and I am stumped on the capital gains bit.

In the last tax year, I sold my business. It was a limited company, I established it with £8k of my own money and I sold it for £14. I can't work out how the capital I put in is deducted from the sale price to work out my profit, because clearly I have only actually made £6k out of the deal, but what is the capital introduced classed as? Is it purchase price, improvement costs or not deductible?

Help!

Thanks in advance for any pointers!

lower threshold for cgt is 10k so I'd not worry too much
what does your accountant say?

The sale proceeds were £14k though - so if I can't deduct the capital introduced then I'll get a CGT bill (although would be small as I would get annual allowance plus entrepreneurs' relief).

I did have an accountant when I had the business but I can't access any of the emails he sent me as the accounts have gone over to the woman who bought the company. I've messaged her (I know her personally, well I'm friends with her DIL) but no reply. I do know there was some way to deduct the capital introduced but I think it was more to do with the purchaser paying off the company's debts and then paying me the rest of the money or something. Very confusing.

but surely the accountant handling the sale gave you a statement of net gain at the end
the capital introduced would probably have been drawn out during te business - v v tax inefficient to do otherwise

you need to talk to the accountant

If you subscribed £6k for the shares, that's your purchase price. If you introduced capital as a director's loan, presumably it was paid back when you sold the business?

You say you sold a company? How did you put the money into the company? Did you buy shares for £8k? Or did you put in a capital contribution? Or was it a loan to the company from you? When you sold the company did you get £14k for the shares? Each would have slightly different outcomes.

The accountant didn't do anything with the sale - there was a solicitor who did the paperwork to transfer the company, but that's all.

In factual terms Sam100, I incorporated and then put my own money into the company bank account to use to buy stock & samples and for other expenses. So I didn't buy shares really I suppose. There was no documentation that it was a loan to the company. I received £14k into my bank account when the purchaser bought the business.

I did discuss things briefly with the accountant before I agreed the sale - I think his suggestion was that part of the funds would pay off the company's debt to me and part would be paid to me for the shares, but in terms of what actually happened there is no documentation that there was a loan that was repaid - I sold the shares for £14k.

Yes so some of the cash received was to pay off your loan to the company and only the remainder is your "gain" to report in the CGT pages. Hope that helps!

Yes that helps, thanks very much