Apologies for not addressing the tax effect of the transaction. Obviously the transfer from partnership to a limited company is a transfer of capital, and can therefore could result in capital gains tax on sale of assets: equipment, fixtures and fittings, or even the business' reputation ('goodwill'). From the description of your case you are likely to get the Entrepreneurs' Relief. Additionally, it is likely that VAT will not be charged on the transfer of assets as the business will be transferred as a “going concern”.

After your partnership is valued, and say you make capital tax gain of £50,000. The gain qualifies for Entrepreneurs' Relief, and Capital Gains Tax is due on £39,400 (£50,000 less Annual Exempt Amount £10,600). At the Entrepreneurs' Relief rate of 10 per cent your Capital Gains Tax due is £3,940.

If you have worked out you do have Capital Gains Tax to pay, you need to report this to HMRC by sending a tax return. The latest you can register is by 5 October after the end of the tax year for which you need a tax return. You may have to pay a penalty if you do not tell HMRC in time that you have Capital Gains Tax to pay.

On the sale price, yes the sale price can be treated as loan to the directors in the new company ie Dr Assets Cr Loan. The loan can then be paid to the directors when the company is profitable. It depends with how you want the funding to be treated. If you treated the intial injection of assets as equity in the company , then the cash paid out of the company is treated as dividends. If you chose to treat the initial funding of assets as loan then the cash payout can be treated as loan( plus interest) repayment. I either case you need to consider the most efficient way of extracting profits from your company as follows:

1.Dividends
The current effective rates of income tax on a dividend are: nil for a basic rate taxpayer (rather than 20%) ; 25% for a higher rate taxpayer (rather than 40%); 36.1% for an additional rate taxpayer (rather than 50%).

2.Loan plus interest
The interest charged, provided it does not exceed a commercial rate, will generally be tax deductible for the company. The company is generally required to withhold 20% tax, which is then paid over to HMRC. In the hands of the director/shareholder, the income will be taxable as savings income and charged at 20%, 40% or 50%, depending on individual circumstances (with a credit given for 20% tax deducted). The loan capital (that is being repaid) is not taxed.

In terms of whether salary or dividends …the general rule is Low salary and high dividends. However you need to work out the most tax efficient tax mix. This link can further explain how to work out the right mix: http://www.cheapaccounting.co.uk/blo...se-from-april/

With regards XXXXX XXXXX of your website: Of course, listing your site for sale on a site like WebsiteBroker.com will tell the market price instantly of what you can sell your site for in the real world. However since you are selling a business partly driven by traffic from the website (40%) or so, valuing a website may not be provide the complete valuation picture. One can value the business based on various investment valuation tools eg current cashflows ; comparable companies; company fundamentals and a range of other methods www.privateequityvaluation.com/. I presume that you expect the value to be about £50k, in that case you should probably go for online sites like odesk, elance, you can easily get a quote of $500 to do a valuation by some small firm. In the case of having not much luck on this, I can provide the valuation service, but I suggest you should probably try the sites above first.

I have tried to provide as much information (more than what we normally provide for the fee). However If you are satisfied, could you please rate this with a positive feedback and; that would be greatly appreciated. If not completely satisfied, prior to leaving feedback, please get back to me and I will do whatever it takes as negative ratings affects my account badly.