Hi all.
My partner and I ran a business (ltd) that traded online using a domain name. The domain was registered personally in 2001. My partner and I sold the domain name to our ltd company for 16000 (8000 each). The ltd company then sold the domain to another company along with all rights to the name, etc (as we no longer wanted to do this kind of business) about 4 months later. Question is, was the initial sale from partner and I subject to CGT or subject to income tax ?
It would be CGT, because you were not in the business of trading in domain names for profit. This is much a similar situation to when distinguishing gain from income in the case of someone buying a property, doing it up, renting it out for a while, and then selling it. If he does this, the rent would be income and the profit from sale would be gain. But if he were basically a serial restorer, buying, doing up, and re-selling, he'd be considered a property developer and profit from the sales would be considered income rather than gain.
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