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Selling part of a Business

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  • 14-05-2018 3:58pm
    #1
    Gerryhide
    Registered Users Posts: 19 ✭


    Hi all

    I have a limited company and number of business operating as part of the company.

    One of which is an internet booking service, I was hoping to sell this part of the business as an "intellectual property" sale i.e website, branding, domain names without selling any of my company, there would be some goodwill included in the sale too; upcoming bookings, client contact list. Theres no stock, inventory or anything tangible.

    I was thinking of selling the IP to the other party as a website for €x amount+vat but I was told that goodwill might be considered as capital gains.. if thats the case, could I sell the IP as a transaction+ vat and sell the goodwill separately for €1 ?

    thanks a mill


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    #2
    crkcvnirl
    Registered Users Posts: 38 ✭crkcvnirl


    Gerryhide wrote: »
    Hi all

    I have a limited company and number of business operating as part of the company.

    One of which is an internet booking service, I was hoping to sell this part of the business as an "intellectual property" sale i.e website, branding, domain names without selling any of my company, there would be some goodwill included in the sale too; upcoming bookings, client contact list. Theres no stock, inventory or anything tangible.

    I was thinking of selling the IP to the other party as a website for €x amount+vat but I was told that goodwill might be considered as capital gains.. if thats the case, could I sell the IP as a transaction+ vat and sell the goodwill separately for €1 ?

    thanks a mill

    You've an interesting problem all right but I'd suggest you speak with an accountant / solicitor knowledgeable in this area on how best to proceed.

    Best of luck


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    #3
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    'You' don't sell anything, the assets belong to the company. Talk to an accountant.


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    #4
    Gerryhide
    Registered Users Posts: 19 ✭Gerryhide


    pedroeibar1 wrote: »
    'You' don't sell anything, the assets belong to the company. Talk to an accountant.

    Cheers, I was considering to sell it as a sale on behalf of the company, not me personally. A company asset is sold, sale/funds go to the company?


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    #5
    antoinolachtnai
    Registered Users Posts: 9,786 ✭✭✭antoinolachtnai


    Why do you think you wouldn't have to pay capital gains tax?

    There is a tax break in relation to intellectual property which you may be adverting to. This is really a benefit for the purchaser rather than the seller.


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    #6
    Buttercake
    Registered Users Posts: 539 ✭✭✭Buttercake


    Isn't the new CG rate 20% for a business sale of less than €1mill ? instead of selling it the way you mentioned with vat at 23 % ?


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    #7
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Buttercake wrote: »
    Isn't the new CG rate 20% for a business sale of less than €1mill ? instead of selling it the way you mentioned with vat at 23 % ?
    Simply put, if a company sells an asset at a profit there is a mixture of both capital gains tax and corporation profits tax. Then, when the company pays the shareholders some/all of that profit as a dividend they pay income tax, etc. on it. OP needs to go talk to his/her accountant.


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