i am a veterinary surgeon, in a 50% partnership including freehold in uk I am immigrating to new zealand in december and selling my 50 % of veterinary practice , possibly including buildings or rental income. I rang the tax office and tey told me if i sell my buisness after i have left the uk in the following tax year , provided i do not return yo live in uk in following 5 years, i dont have to pay capitol gains tax. My accountant says this is incorrect, that because i am a trade , i do have to pay capitol gains tax.
please could you advise:
1. which party is correct
2. any way of redusing tax (including tax on profits usually paid 12 months later)
3.can i sell my buisness this tax year, invest in the stockmarket as a new buisness, then sell shares in the next tax year to avoid capitol gains tax?
4.can i return to uk to visit relatives and if so work a few weeks to cover airfare costs?
Why did the inland revenue say that i was exempt from capitols gains tax?, they also referred me to their web site which had quite a lot about selling buisnesses and how you could be exempt from capitol gains
Many front line HMRC staff have limited knowledge I'm afraid. Most of the knowledgable staff with many years experience have left or taken redundancy. It's a shocking way for the UK's tax authority to be run.
The individual who said you were exempt probably did so because they were under the misapprehension that where you sell an interest in a UK business the tax treatment is the same as for the disposal of non-business assets such as rental property, your home or shares in companies. Take a look at questions 2 and 4 and their respective answers here.If your business was run through a limited company in which you had shares you might be able to avoid CGT altogether if you sold you shares whilst non-resident. The reason for this is that it would be the limited company running the business, not you, albeit that is a fine line. Since the business assets are owned personally, it would probably be seen as aggressive tax avoidance and challenged by the tax office if you incorporated shortly before selling up but you should discuss this with your accountant.