Capital Gains Tax for Companies

Corporations pay CGT when they “dispose” of:

  • Land and buildings
  • Fixtures and fittings
  • Plant and machinery
  • Shares
  • Registered trademarks
  • Business’s reputation

In order to determine whether tax needs to be paid companies need to work out gains. The capital gains tax is only paid by sole traders and business partnerships. Other types of companies must pay a corporate tax.

The gain is worked out as a difference between what the business asset was bought for and what the company sold it for. The market value will be used if:

  • you gave it away (there are different rules if it was to your spouse, civil partner or a charity)
  • you sold it for less than it was worth to help the buyer
  • you inherited the asset (and don’t know the Inheritance Tax value)
  • you owned it before April 1982

  • Some of the costs of buying, selling and improving the asset can be deducted from your gain. This includes:
  • fees for valuing or advertising assets
  • costs to improve assets (but not normal repairs)

Stamp Duty Land Tax and VAT (unless you can reclaim the VAT)

Tax Relief

Companies may be able to reduce the amount of capital gains tax to be paid if they are eligible for tax relief:

Relief Description Eligibility
Entrepreneurs Relief Pay 10% Capital Gains Tax on qualifying profits if you sell all or part of your business (instead of the normal rates) For sole traders, business partners or those with shares in a ‘personal company’
Business Asset Rollover Relief Delay paying Capital Gains Tax when you sell or dispose of some types of asset if you replace them Buy the new asset within 3 years of disposing of the old one. Use the old and new assets in your business
Incorporation Relief Delay paying Capital Gains Tax when you transfer your business to a company Transfer all your business and its assets (except cash) in return for shares in the company
Gift Hold-Over Relief Pay no Capital Gains Tax if you give away a business asset - the person you gave it to pays tax when they sell it You used the business asset for trading as a sole trader or partner

Our past cases

Ben
Entrepreneur, London

We were approached by an Australian national who was currently holding a valid Tier 2 visa however, he wished to switch into Tier 1 Entrepreneur. Before coming to us our client has already made purchases for his future café...

(Read more)
Layla
Consultant, London

Contacted us seeking advice in regards to her refusal. Our client was refused on the basis of her business plan as it did not convince the Entry Clearance Officer that she had a Genuine Intention of setting up a business in the UK...

(Read more)

Contact us

44 207 99 36 346

Our past Cases

trust-pilot Logo
trust-pilot Text Logo

Great 7.7

"They assist me well...
(read more)
-Stissa
Read some of the latest experiences form our clients Read more reviews
Write a review

Write reviews of our service and share your experience with others

Contact us