Self-employed / Any tax relief on retirement?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
I have a client (self-employed) who paid £16K for a business (mainly goodwill) over ten years ago, they took out an interest only loan to pay for the business.

They are now retiring and beleive that they should get tax relief on this £16K originally paid.

Is it right that this would only happen if they sell this business? The business is winding down and there is nothing to sell..

Any advice??? , as it seems that this £16K was paid and my client has no benefit from this, they just have the £16K loan capital still to be repaid...

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Self-employed / Any tax relief on retirement?

    So, in the beginning:
    - £16K = loan capital
    - Purpose of loan = to purchase fixed assets - tangible or otherwise

    At the end:
    - Loan capital not repaid
    - Assets probably used up by now.
    No help that I can see - client took out a loan to purchase assets which would have been depreciated/ amortised over their useful lives and any applicable capital allowances claimed. Client has already had any available relief on the assets they purchased with the loan.
    If they haven't set aside money to repay the loan, it's tough I'm afraid. The assets and the loan are two entirely separate transactions.
    If they sell the business, hopefully they'll get their money back.
    Good luck.

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