Any accountants in? Is stamp duty an "expense" when buying a business?

Can any accountants help with this question?

If you pay stamp duty when you buy a business is it classed as an “expense” that can be set against your first years income for tax purposes?

errr no, its a tax

Yes I think so. Set up a company which buys the business, various expenses can be offset against company income. The offset would go inside the company not in your tax retrun.

I don’t think stamp duty is tax deductible no.

Only when calculating CGT when you come to sell the property, then is can be offset against the gain.

Stamp Duty on land would be a capital expense. Stamp duty on buying shares is cost to the purchaser.
Another reason to use an accountant.

If you’ve paid SDLT On buying a business then you must have bought the shares in the company.
The SDLT cost serves to increase the base cost of the shares for the purchasing entity/ person and thus reduces your gain if you ever sell the shares in the future.

When you bought/buying this business are you not taking any professional advice, as just add this question to them…

Craig, sorry slight hijack, is the dealing cost and stamp duty on shares not offsettable against cgt….dreaming it may be an issue 1 day. Thanks in advance

Craig makes a very valid point in his last sentence. I would add it’s best to get the advice before the purchase is made as there may well be implications as to how it’s executed.

Poolman I believe the answer to that question is no. Capital Gain is calculated vs puchase price before any purchase taxes

Ok thanks, i was being lazy so just looked on hmrc site, you can offset sdrt and dealing costs against cgt. Dreaming 1 days i ll need to

CGT tax free allowance is about £10k from memory. If you get near that sell and repurchase (“bed and breakfast”)

As above – buying a business is a capital event so there is no relief for the cost of the capital assets involved (plant, cars, buildings etc – unless capital allowances/intangible deductions are available). The cost of stock (say) on the other hand is a deductible amount when sold in future. So any stamp duty on the cost of the business is a capital cost and cannot be deducted. I assume you are talking about stamp duty land tax charged on buildings / leases because rare for stamp duty to arise on other assets? If shares in a company are bought (which carries on a business)then no deduction for the cost of the shares (capital cost) or for the stamp duty either (also capital cost).

When I say deducted in mean deducted now. As noted the stamp duty is added to the tax basis of business/shares and is deducted when the assets are sold in future.

Jamba – you need to be out of the stock for 30 days now or its counted as a matched sale and doesnt qualify.