| Commentary

34.1 Income tax

| Commentary

(f) Personal taxation on the proprietor’s lifetime realisation of his investment

34 Sole trader

A lifetime disposal by a sole trader of his business (whether by sale or gift) will have a variety of tax consequences.

34.1 Income tax

The disposal of a business will obviously lead to the discontinuance of the existing trade and so the closing year rules will apply1. In the last tax year of the business, broadly the sole trader will be taxed on the trading profits of the business from the end of the last taxed accounting period to the date of discontinuance, less any overlap profit2.

Where the

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