Selling a business: tax?

runningoutoftime

Hello.

My wife has built an online business over the last few year and now we are on the verge of selling it to someone else for five figures.

My wife is self-employed and earned money from this business (and other businesses).

Would she have to pay tax on the funds received if/when she sells?

Thanks.

Pennywise

Yes, she'll be liable to capital gains tax, but subject to the annual allowance and entreprenneurs relief. For simplicity, work on 10% on the profit over £10k.

runningoutoftime

Thanks! So if it went for £20K, tax would be (simplistically) £1K.....?

Randvegeta

runningoutoftime wrote: »

Thanks! So if it went for £20K, tax would be (simplistically) £1K.....?

I'm sure you could muddle things to make the profit look much less.

As Pennywise said, it's taxed at 10% on the profit ABOVE 10K. So what you need to work out is how much 'profit' your wife will make. If you can make some deductions (costs and the like), then you may be better off (tax wise).