Last updated: 14 October 2026
Is selling your first business as a student taxable?
Yes, being a student doesn’t change the tax rules. If you sell a business you built, the gain on assets like goodwill, a website or shares is usually subject to capital gains tax (CGT), and any profits you made while trading are subject to income tax. But students often have low other income, so they can use their £12,570 Personal Allowance, the £3,000 CGT annual exempt amount and the lower 18% CGT rate. Business Asset Disposal Relief may also apply.
What is taxed
| Item | Tax |
| Trading profits before sale | Income tax and Class 4 NIC through Self Assessment |
| Gain on selling the business (goodwill, IP, domain) | CGT at 18% or 24% |
| Gain on selling shares in your company | CGT, possibly with BADR at 18% |
| Stock sold as part of the deal | Trading income |
| Equipment sold | Capital allowances balancing adjustment |
Business Asset Disposal Relief
If you’ve owned the business for at least 2 years, BADR may apply, taxing gains at 18% on up to £1 million of lifetime gains. In 2026/27, that’s the same as the main basic rate, so the benefit is mainly for gains that would otherwise be taxed at 24%.
Example
Priya started an online store in her first year at university. In her final year, 2026/27, she sells it for £60,000, including £55,000 for goodwill and the domain, and £5,000 for stock. Her trading profit for the year, including the stock, is £8,000, within her Personal Allowance. Her capital gain is £55,000 (she had no base cost), minus the £3,000 exemption, so £52,000 is taxable. Without relief, some of it falls in her basic rate band at 18% and the rest at 24%. As she has run the business for more than 2 years, she claims BADR, so the whole £52,000 is taxed at 18%: £9,360.
Ways to reduce the tax
- Spread payments over two tax years with deferred consideration, using two annual exemptions and basic rate bands
- Make pension contributions to extend the basic rate band
- Check whether BADR applies
- Claim all costs of selling, such as legal fees
Student loans
Capital gains aren’t counted as income for student loan repayments, but trading profits are. Repayments start the April after you finish your course.
Reporting
Register for Self Assessment if you have trading income over £1,000 or capital gains to report. CGT on business assets (not UK residential property) is paid by 31 January after the tax year.
Benefits and grants
Student finance is based on household income, and a large sale might affect future assessments. Check with your student finance provider.
Common mistakes
- Assuming students do not pay tax
- Forgetting to report trading income from before the sale
- Missing the BADR claim deadline
- Not keeping records of costs, such as website development, which may form part of the base cost
Frequently asked questions
Does being under 25 make a difference?
No.
Is selling a social media account taxable?
Yes, if sold as a business asset.
What if I’m paid in shares of the buyer?
Special rules may defer the gain.
Do I need an accountant?
For a sale of this size, it’s usually worth it.
Related: reliefs to reduce gains on shares, Business Asset Disposal Relief update and student loan deductions in tax returns.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with tax for new businesses. See our startup accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
