Help with Capital Gains Tax form

sparkiemalarkie

Hello, a question about filling in the form to pay capital gains tax.
If you sell 2 assets to the same person for a combined price, do you need to list each asset on the tax return or can it be treated as 1 entry / 1 total ?

tia

sx

eskbanker

When you say 'the form', are you referring to the standalone CGT reporting facility or the section within self-assessment?

Having said that, it may not matter - I'm pretty sure that you're obliged to show your workings with either, at an asset level.

sparkiemalarkie

Ah, hadn't realised that there was more than 1 - it's the section within the self assessment.
I managed to get through to HMRC and the team leader I spoke to didn't think it mattered as long as the figures were correct- hmm

sx

dales1

Yes, eskbanker is correct.

See HMRC sa108notes "You'll need a separate computation for each asset you sold".

sparkiemalarkie

dales1 said:

Yes, eskbanker is correct.

See HMRC sa108notes "You'll need a separate computation for each asset you sold".

So how should the the 2 assets be divided? Should I make up the values?
All the paper work - contract and bank statements  only show the combined value.

I am aware of HMRC sa108notes "You'll need a separate computation for each asset you sold". and this is what's confusing.

sx

DRS1

You could try apportioning the figures based on the base costs of the two items.

eskbanker

sparkiemalarkie said:

dales1 said:

Yes, eskbanker is correct.

See HMRC sa108notes "You'll need a separate computation for each asset you sold".

So how should the the 2 assets be divided? Should I make up the values?
All the paper work - contract and bank statements  only show the combined value.

How did you work out the price at which to sell?  Is this property, investments or other assets?

sparkiemalarkie

It was 2 YouTube channels (intangible asset)
Price was worked out according to AdSense income and number of subscribers
There were no set up fees - both channels created from scratch
The main one was advertised
Interested party tried to negotiate down the price so the 2nd (smaller) channel was included
Purchase price for the 2 was $64,350.00 USD

I do not have a copy of the exchange rate on the day but I do have a record of what landed in the bank after all fees were deducted

sx

poseidon1

sparkiemalarkie said:

It was 2 YouTube channels (intangible asset)
Price was worked out according to AdSense income and number of subscribers
There were no set up fees - both channels created from scratch
The main one was advertised
Interested party tried to negotiate down the price so the 2nd (smaller) channel was included
Purchase price for the 2 was $64,350.00 USD

I do not have a copy of the exchange rate on the day but I do have a record of what landed in the bank after all fees were deducted

sx

On the assumption you were previously declaring the YouTube income stream as trading income and paying self employed tax on that basis, then on sale of your businesses you should be able to claim business asset disposal relief ( BADR ) on your disposal proceeds - guidance below

https://www.gov.uk/business-asset-disposal-relief/work-out-your-tax

From what you have stated your taxable gain appears to be:

$64,350 ( as credited to bank) less  £3,000 (cgt exemption) taxed at the reduced BADR rate of 10%. 

Given you have no opening cost figure for either business, I would be inclined to report as a single disposal. The 10% tax rate does not differ either way.

sparkiemalarkie

poseidon1 said:

sparkiemalarkie said:

It was 2 YouTube channels (intangible asset)
Price was worked out according to AdSense income and number of subscribers
There were no set up fees - both channels created from scratch
The main one was advertised
Interested party tried to negotiate down the price so the 2nd (smaller) channel was included
Purchase price for the 2 was $64,350.00 USD

I do not have a copy of the exchange rate on the day but I do have a record of what landed in the bank after all fees were deducted

sx

On the assumption you were previously declaring the YouTube income stream as trading income and paying self employed tax on that basis, then on sale of your businesses you should be able to claim business asset disposal relief ( BADR ) on your disposal proceeds - guidance below

https://www.gov.uk/business-asset-disposal-relief/work-out-your-tax

From what you have stated your taxable gain appears to be:

$64,350 ( as credited to bank) less  £3,000 (cgt exemption) taxed at the reduced BADR rate of 10%. 

Given you have no opening cost figure for either business, I would be inclined to report as a single disposal. The 10% tax rate does not differ either way.

Thank you for your reply
Yes YouTube income was declared and paid up for 2023/24
I have explored BADR and it seems this does not qualify as the 2 YouTube channels were less than 6 months old when they were sold.
The YouTube account has been 'active' for many years, with the intention of making money, with various videos uploaded intermittently. Non of the previous videos became profitable.

The purchase price was  $64,350 the amount that arrived in the bank account was £46,993 after a raft of fees.
So can I use the Net amount as the taxable gain?
There are also advertising costs that I assume can be deducted too.

tia

sx

poseidon1

sparkiemalarkie said:

poseidon1 said:

sparkiemalarkie said:

It was 2 YouTube channels (intangible asset)
Price was worked out according to AdSense income and number of subscribers
There were no set up fees - both channels created from scratch
The main one was advertised
Interested party tried to negotiate down the price so the 2nd (smaller) channel was included
Purchase price for the 2 was $64,350.00 USD

I do not have a copy of the exchange rate on the day but I do have a record of what landed in the bank after all fees were deducted

sx

On the assumption you were previously declaring the YouTube income stream as trading income and paying self employed tax on that basis, then on sale of your businesses you should be able to claim business asset disposal relief ( BADR ) on your disposal proceeds - guidance below

https://www.gov.uk/business-asset-disposal-relief/work-out-your-tax

From what you have stated your taxable gain appears to be:

$64,350 ( as credited to bank) less  £3,000 (cgt exemption) taxed at the reduced BADR rate of 10%. 

Given you have no opening cost figure for either business, I would be inclined to report as a single disposal. The 10% tax rate does not differ either way.

Thank you for your reply
Yes YouTube income was declared and paid up for 2023/24
I have explored BADR and it seems this does not qualify as the 2 YouTube channels were less than 6 months old when they were sold.
The YouTube account has been 'active' for many years, with the intention of making money, with various videos uploaded intermittently. Non of the previous videos became profitable.

The purchase price was  $64,350 the amount that arrived in the bank account was £46,993 after a raft of fees.
So can I use the Net amount as the taxable gain?
There are also advertising costs that I assume can be deducted too.

tia

sx

If the advertising costs were directly incurred in facilitating the marketing and ultimate sale of the You tube channels  then these are deductible from the gain before tax. Guidance below refers -

https://www.gov.uk/capital-gains-tax-businesses/work-out-your-gain

Would seem reasonable to use the £46,993 proceeds ( less any other allowable sale expenses) as the basis for calculating your  net gain. 

 I note you don't appear to be eligible for BADR so normal  CGT rates apply.