Taxes and Paperwork When You Sell or Lease a Website: US, UK, EU, Canada and Australia

This is general information, not legal or tax advice. Tax rules change, and how they apply depends on your circumstances. Ask a qualified accountant or tax adviser in your country before you sell or lease a website.

How a website sale is taxed turns on four questions: where you are tax resident, whether you sell as a person or through a company, how long you owned the site, and whether you are paid once or over time. The sections below collect what official sources in the US, UK, EU, Canada and Australia say on those points, with each source linked. Use it to prepare questions for your accountant.

Why is a website tax question harder than it looks?

A website is an intangible asset, and official guidance rarely names websites or domains, so an accountant starts from the general rules below.

The structure of the deal matters as well. A cash outright sale is a single disposal. A lease-to-own deal, like the one described in our month-by-month guide, spreads payments over time and ends with ownership passing once the agreed price is paid in full. Depending on how the written agreement is drafted, a tax authority may look at those payments as installments of a sale price or as payments for the use of an asset. That is a question for your accountant.

United States: what does the IRS say?

The IRS says “almost everything you own and use for personal or investment purposes is a capital asset”, and an asset held more than one year gives a long-term gain. But IRS Publication 544 lists business assets as noncapital assets, so a website used in a business may not get plain capital asset treatment.

If you sell a whole business, Publication 544 says “the sale of a trade or business for a lump sum is considered a sale of each individual asset rather than of a single asset.” Buyer and seller must use the residual method to split the price across the assets, including goodwill. Both sides file Form 8594 when a group of assets making up a trade or business is transferred and goodwill or going concern value attaches, or could attach.

Other points from Publication 544 that may matter:

• Section 197 intangibles. Goodwill, going concern value, customer-based intangibles, formats and know-how held in a business are intangibles “whose costs are amortized over 15 years.”
• Recapture. Section 1245 property includes personal property, tangible or intangible, subject to depreciation or amortization. Past write-offs can turn part of a gain into ordinary income.

Long-term capital gains rates. For 2025 the IRS lists 0% up to taxable income of $48,350 (single) or $96,700 (married filing jointly), 15% up to $533,400 (single) or $600,050 (joint), and 20% above. For tax years beginning in 2026, Rev. Proc. 2025-32 sets the maximum 0% and maximum 15% amounts at $49,450 and $545,500 for single filers, $98,900 and $613,700 for joint filers, and $66,200 and $579,600 for heads of household.

Reporting. The IRS says the old Form 1099-K threshold was reinstated, so platforms file only if payments exceed $20,000 and transactions exceed 200. That does not decide whether you owe tax. In the IRS’s words, “all income, no matter the amount, is taxable unless the tax law says it isn’t, even if you don’t get a Form 1099-K.”

Payments for use. The IRS says payments for the use of real estate or personal property are “taxable to you as rental income.”

United Kingdom: what does HMRC say?

For individuals, Capital Gains Tax rates are 18% and 24% for both 2025/26 and 2026/27. The annual exempt amount is £3,000 for individuals and £1,500 for most trustees in both years.

Business Asset Disposal Relief (BADR) applied a 10% rate on or before 5 April 2025, 14% to 5 April 2026 and 18% from 6 April 2026. It generally requires that you were a sole trader or partner for at least 2 years, and when a business closes, the assets must be disposed of within 3 years.

Companies. Under the corporate intangibles rules, HMRC guidance says write-offs are deductible as income items and “all receipts from those assets… are similarly revenue items.” Corporation Tax is 25% on profits over £250,000 and 19% on profits of £50,000 or less, with Marginal Relief in between.

European Union: how does VAT treat a website sale?

Income tax is set nationally, while each country’s VAT rules are built on the EU VAT Directive. Four provisions are relevant:

• Article 25. Services include “the assignment of intangible property, whether or not the subject of a document establishing title.” On that basis a domain or website sale is generally a supply of services for VAT, unless the whole-business rule below applies.
• Article 44. Services supplied to a taxable person are supplied where that customer is established.
• Article 19. On a transfer of a totality of assets or part of them, “Member States may consider that no supply of goods has taken place.” Whether this applies depends on the country.
• Reverse charge. The EU’s Your Europe guidance says that when you sell services to businesses in another EU country you “don’t usually need to charge” VAT, and the customer pays at its own country’s rate, with “several important exceptions.”

Estonia

The Estonian Tax and Customs Board lists corporate income tax at 22/78 on distributed profit; the 14/86 reduced rate ended from 2025. A company pays tax when it distributes profit. Individual income tax is 22% in 2025 and 2026. “Gains from transfer of property” are listed as taxable income for individuals.

Germany

Under § 23 EStG, a private sale of “anderen Wirtschaftsgütern” (other assets) is taxable if no more than one year passes between acquisition and sale, extended to ten years if the asset produced income in at least one calendar year. The statute does not name websites. Moving an asset into private hands by withdrawal or business closure (Betriebsaufgabe) counts as an acquisition, which restarts the clock. Income that belongs to another category, such as business income, is taxed under that category instead. Gains stay tax-free if total private sale gains in the calendar year are under 1,000 euros.

Separately, § 21 EStG treats income from the time-limited provision of rights as rental and leasing income.

Canada: what does the CRA say?

On March 21, 2025, the government announced it would cancel the proposed increase in the capital gains inclusion rate, with the CRA reverting to the enacted inclusion rate of one-half.

For a business buyer, the CRA’s capital cost allowance classes put goodwill and former eligible capital property in Class 14.1 from January 1, 2017, at 5% declining balance for property acquired after 2016.

Australia: what does the ATO say?

Australian resident individuals can reduce a capital gain by 50% under the CGT discount if they owned the asset for at least 12 months. The ATO adds that “companies can’t use the CGT discount.”

The ATO’s small business CGT concessions apply where turnover is under $2 million or net assets are not over $6 million (Australian dollars), tested just before the CGT event, and an active asset test is met. The concessions are the 15-year exemption, the 50% active asset reduction, the retirement exemption and rollover.

The ATO also says assessable business income includes royalties for the use of patent or copyrighted material, and lease payments if you are in the business of hiring out assets.

Lump sum or installments: how does each region treat deferred payments?

A lease-to-own deal pays you over months or years. This table summarizes what the sources say; it recommends neither route.

United States. IRS Publication 537 defines an installment sale as above. Installment treatment does not apply to inventory, dealer sales, traded securities or losses, and you can elect out and report the whole gain in the year of sale. Depreciation recapture is reported “in the year of sale, whether or not an installment payment was received that year,” so some tax may be due before all the money arrives.

United Kingdom. Under section 28 TCGA 1992, the date of disposal is when the contract is made, or when conditions are satisfied if it is conditional. Where future payments are ascertainable at disposal, HMRC’s example of four annual instalments of £50,000 shows that “the full amount is included in the disposal proceeds.” Under section 280, if consideration is payable over more than 18 months, the seller may ask to pay the tax by instalments, normally 50% of each instalment of consideration.

Canada. The CRA’s capital gains guide explains that a reserve defers part of a gain for proceeds not yet received. Most reserves run for a maximum of four years, so the gain is included over five, and the reserve is claimed on Form T2017.

Australia. The ATO says CGT event A1 happens “when the disposal contract is entered into or, if none, when the entity stops being the asset’s owner.” The contract date sets the tax year.

Payments for use. If an agreement is structured as payment for the use of a site rather than installments of a price, an accountant may look at the US rental income rule, Germany’s § 21 and the ATO’s royalties and lease payments rule instead.

What paperwork should you keep?

In any region, keep:

• The signed agreement. The price, the payment schedule, the date it was signed and when ownership passes.
• Records of purchase and costs. What you paid for the domain or site, and what you spent building, hosting and renewing it.
• Payment records. Every payment received, with date, amount and running total. For a lease-to-own deal, this is the record of each installment.
• Proof of how long you owned it. Registration and transfer records. Holding periods matter in the US, Germany and Australia.
• Business records. If the site belonged to a closed business, the closure date and company documents. UK BADR and Germany’s § 23 both refer to business closure.
• Allocation forms. In the US, Form 8594 where a trade or business is transferred.

Our preparation guide covers gathering the rest of your site’s records. If the company that owned the site is insolvent, see our guide on selling a website in liquidation, and speak to the appointed administrator and a lawyer.

What to do next

• Collect your agreement, cost records and payment records in one folder.
• Take this page to a qualified accountant in your country and ask how the rules apply to a cash sale and to a lease-to-own deal in your case.
• Send us your site for a free valuation to see both a cash and a monthly offer where both fit, so your accountant can compare real numbers.

This is general information, not legal or tax advice. Rules change and every case differs. Ask a qualified accountant or tax adviser before you decide.