RE: Tax on Leasehold business sales

CBT, hopefully this link will be more helpful and informative than the preceding waffle as I guess your primary concern is a potential liability for capital Gains Tax (CGT):

http://www.hmrc.gov.uk/cgt/property/calc-cgt.htm

Note especially Step 5 from the link which describes the various reliefs applicable to potential CGT liability.

Of course, before you have to worry about CGT on the sale of a leasehold pub, you have to:
a) Manage to sell it, and
b) Realise more for the taxable elements of the asset than you paid for them

CGT won’t be payable on any increase in the value of fixtures and fittings which you can substantiate with proof of capital expenditure on F&F. The same is true for certain improvements you might have made to the property. A leasehold pub is usually part-domestic dwelling and part-business asset, and as CGT applies only to the gain in the business asset, an allowance for the domestic portion is made accordingly.

The ‘Entrepreneurs Relief’ (see section 5) should apply, the effect of which is to reduce the rate of CGT from 18% to 10% provided you have operated as a sole trader/partnership rather than a limited company. This ‘Entrepreneurs Relief’ (announced in 2008) replaced ‘taper relief’ which in turn replaced ‘retirement relief’ (alluded to in the previous post) in the late 1990’s. (If you want to know how things were in the 1990’s, then Nason’s your man!)

All expenditure relevant to your disposal such as legal fees, accountant’s fees, advertising and agent’s commission is allowable (offset) against any gain. That little lot is likely to make a £12,000 hole in any gain you might have made, maybe to the point where a notional gain in lease premium value might become a net capital loss.

After all that, you have got a personal exemption from CGT if your chargeable gains in the tax-year are less than £10,100 currently (the Annual Exempt Amount).

As to whether you need a tax advisor, the purpose of the advisory notes contained in the link is to help the taxpayer himself to determine his liability for Capital Gains tax. You declare the detail in the supplementary pages of your Self Assessment taxation return. If you are unsure of anything, HMRC are there to help you get it right. If your accountant submits your tax return on your behalf, it’s not a great deal of work for him to complete the Capital Gains section of the return.

Hope this helps.