(c) Taxation of the capital profits of the business

21 Sole traders

21.1 Calculating the gain or loss

When a sole trader disposes of a capital asset used in his business, that asset is likely to be a chargeable asset for capital gains tax purposes and the disposal will presumably create either a gain or a loss.

The basic calculation of a gain or a loss for capital gains tax purposes involves finding the difference between the price the trader paid for the chargeable asset and the amount for which he is selling it1. The starting point is therefore to establish the consideration

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