Tax treatment of sale of surgeon’s business

A surgeon developed a worldwide following through his private orthopaedic surgery practice. He sold his business to Spire for £1m. This involved the disposal of his right to earn any income from the practice the transfer of all intellectual property including the database of former patients website domain name and the business name. He agreed to practise in the UK only through Spire although it was aware that he wished to volunteer overseas.

HMRC said the taxpayer had not sold his business but rather changed his way of working. Thus the £1m formed part of the profits of his profession under ITTOIA 2005 s 5. 

The taxpayer appealed. He said he had sold his business as a going concern and should be assessed to capital gains tax.

The First-tier Tribunal said it was ‘largely a question of fact’ as to whether the taxpayer had sold his business. It concluded...