Selling an unincorporated business will affect your income tax. Your income may be lower in the year of sale because you do not have a full year’s profits, or it may be higher because the self-assessment rules mean you are taxed on more than a year’s profits in the final year – which can happen only if your accounting year is not the same or nearly the same as the tax year.
If you sell business equipment on which you have claimed capital allowances, you may have a balancing allowance, which will reduce your taxable profit or a balancing charge which increases it.Last Updated
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