Work out your gain
Your gain is usually the difference between what you paid for your business asset and what you sold it for.
Use the market value instead 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
If the asset was given to you and you claimed Gift Hold-Over Relief, use the amount it was originally bought for to work out your gain. If you paid less than it was worth, use the amount you paid for it.
You can deduct certain costs of buying, selling or improving your asset from your gain.
Costs you can deduct include:
- fees, eg 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)
You can’t deduct certain costs. These include:
- interest on a loan to buy your asset
- costs you can claim as business expenses
Contact HM Revenue and Customs (HMRC) if you’re not sure whether you can deduct a certain cost.
You may be able to reduce or delay paying tax on your gains if you’re eligible for tax relief.
Work out if you need to pay
When you know your gain you need to work out if you need to report and pay Capital Gains Tax.
If you’re in a business partnership:
- work out your share of each gain or loss
- the nominated partner must fill in form SA803
You can get help with working out your tax, eg from an accountant.
Reporting a loss
The rules are different if you need to report a loss.