Tax implications on sale of Business name

Good evening, After an ongoing trademark dispute I’m now in negotiations to sell my business name and everything associated with it to a larger company, so in order to aid these negotiations I’m trying to understand what my total tax implication will be, both at a business and personal level. I’m the sole director of a limited company and currently a lower rate tax payer. The sale will involve the name, the registered trademark, and presumably our domain name, email addresses, branding logos etc. effectively anything that is remotely related to the name of our business. In terms of tax, from what I have researched so far, if all of the above I’ve listed are classed as business assets, they could potentially qualify for BADR, would this be the case? If so, I’ve also read the profit or gain would be based on the Initial cost, minus the profit, but how would I go about calculating the initial cost, would it literally just be the cost of things like the domain registration etc. which would be minimal? I also have an agreement with an ex director that they will receive 30% of the net sale proceeds, I appreciate they will have their one tax implications, but from my perspective as the sole business owner, could this 30% be deducted from the total amount and classified as an expense? Likewise I will need to spend around £10k on new branding, website, etc. etc. how will this impact the total liability from the total received? Essentially any guidance on what my total tax liability is likely to be, as well as how the payments to an ex director and associated rebranding costs will affect this also will be extremely useful. I do of course have an accountant, but they have got things far simpler that this wrong in the past, so I want to be forwarded before it all happens.

[Display name amended - Admin]

Hi tomgoldsmith,

You can find HMRC guidance on Business Asset Disposal Relief (BADR) by going to:
 Business Asset Disposal Relief (Self Assessment helpsheet HS275). 
If that guidance does not answer all your questions, you can contact HMRC by calling 0300 200 3310 or writing to Self-Assessment, HM Revenue and Customs, BX9 1AS. 

Thank you.
 

Thank you, I have read that in full, but it isn’t clear if the sale of a business name would qualify from BADR? And also how the associated costs of rebranding, and paying an ex director could/would be factored in, as well as how to value the original cost of the assets?

Hi,

The sale of the name would be the same as the sale of goodwill as the business name or brand is part of what is defined as goodwill. Relief under BADR may be due, subject to the restrictions outlined in the guidance below: 

CG64006 - Business Asset Disposal Relief: relevant business assets - exclusion of goodwill in certain circumstances from 3 December 2014

Due to the technical nature of the second part of your query we would recommend you contact us to speak to a technical inspector or write to us outlining your query providing as much information as you can.  

Contact HMRC

Thank you.