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I have recently taken on a new limited company client and have started work on preparing the accounts for the year ended 31 May 2008.
At the end of that accounting year the limited company sold its database to an independent third party for £1 plus a percentage of that company’s monthly net profits in excess of a particular sum for the next four years.
In the first seven months following the sale no profit was made and no payment received.
The next two months resulted in the receipt of £833 in total. There then followed two months of nothing and one month of £110.
I would very much appreciate readers’ thoughts as to what figure should be used when calculating the capital gain and thus the corporation tax liability on the sale.
From the receipts that we know of so far I am not sure whether...
