selling a domain

Knaan09 · Nov 1, 2010

I've never sold a domain before and would appreciate some advice. I'm looking to sell a .com domain to someone in the US. We're looking to go through escrow.com, is there anything else i need to have in place to make sure i don't get scammed?

Thanks.

nicedomains · Nov 1, 2010

Escrow is a pretty safe option, you will need to be patient and understand you will be transferring your domain name before you receive any money. If your buyer has agreed to use escrow as well, there is not much more precaution to take as far being scammed unless you do not use escrow and ask for pre-payment for the domain. Is your buyer an individual or company?

Bailey · Nov 1, 2010

The procedure is in fact.

The domain transfer direct to the customer once Escrow confirm receipt of payment. The entire transaction is Stateside hence it's popularity with Americans, The charges aren't cheap - usually around US$70 + wire transfer fee from your bank. The service is as safe as any transaction can possibly be.

Both parties have to create an Escrow account, which is a plus as you can check status etc on-line and not rely on email updates, Payment is via a wire transfer ( though you can request other methods within the US) and usually completes in a day or two once payment is released. (they advise -up to 7 days but between the US and UK its always quicker)

Also Ask your customer to set the inspection period to 1 Day, otherwise it defaults to a 7 day inspection period, and its a pain if you try to change it afterwards.

In a perfect scenario - Your customer pays Escrow via internal US wire banking and is almost instant. Both you and the customer hold accounts at the same domain registery service , allowing for an instant internal push - an agreed one day inspection period, whole deal done and dusted in about 72 hours

accelerator · Nov 1, 2010

escrow.com as a payment method is designed to prevent scamming, so just by opting to use this method you are greatly improving your chances of a safe transaction.

If you feel you need even further checks, you could ask the buyer for a landline telephone number and say you'll call them at a particular time. At least then you can find out a bit more about your buyer to give you confidence in the transaction, and you have a little more contact info for them.

Rgds

Knaan09 · Nov 1, 2010

Thanks for the reassurance guys. When selling domains, are there any tax implications such as CGT, VAT, etc?

accelerator · Nov 1, 2010

Gains on domains are taxable. Exactly how you are taxed will depend on your own circumstances, e.g. whether you are operating as a sole trader or a LTD company.

Rgds

Knaan09 · Nov 3, 2010

Thanks. I'll try and check this with my accountant but they're not really experienced in online stuff. I'm hoping the tax man isn't going to take a 40-50% cut of any sale.

retired_member13 · Nov 3, 2010

Sedo will do Escrow on domain sales charged at 3% of the sales price, and they will make the transfer bit easier if you're not used to doing it.

Knaan09 said:
I've never sold a domain before and would appreciate some advice. I'm looking to sell a .com domain to someone in the US. We're looking to go through escrow.com, is there anything else i need to have in place to make sure i don't get scammed?

Thanks.

Knaan09 · Nov 18, 2010

We don't buy/sell domains as part of our main business but occasionally we get offers for some of our developed domains. All the domains are related to our main offline business. The company is Ltd.
How are domains treated by HMRC and in the accounts? Are they assets?
e.g. if i bought a domain a few years ago for £100 but now want to sell it for £10000, will i need to charge vat? will there be other tax payable on this sale?
My current accountant is not familiar with online business so would appreciate some help.

Takwa · Nov 19, 2010

Companies don't have CGT, so as long as the domain belongs to the company then it's pure profit.

For a more detailed view on is your domain a Asset or Expense please visit more blogpost Domain Accounting.

If your domain is defined as stock then you need to charge VAT to all UK buyers only, if it's assets, you will still charge VAT, unless that sale of asset is "Transfers of assets that comprise a business or part of a business being transferred as a going concern" then you're exempted.