I submitted for the first time a CG34-post transaction valuation check for a client that incorporated last year to the shares valuation-at Fitz Roy House. Gave all my calculations on how I arrived at the goodwill valuation, based on profits for the past 5 years.
Revenue have written back requesting: --Accounts for past 3 years
-Full description of business activities
-Description of client's role and his time spent in the day-to-day running of the business.
-How turnover is generated-If any contracts existed or advertising undertaken at date of valuation
-Plus if we have any other information such as comparison made with a similar sized business.
Is this a normal response from the revenue? As I had thought they the process was fairly straightforward with minimal questions raised.
I would appreciate advice of do's and don'ts when responding to the revenue.
Do I need to worry?
Roger
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Give them the info.
Its difficult to say without seeing your valuation. I would supply them with the information they want and see what reply they come up with. Then take a view on the technical merits and amounts involved if they should not agree with your workings.
Obviously one of the points they will be thinking of is whether the Goodwill is personal and if so the extent to which it can be and has been assigned.
Make sure you know exactly what the tax consequences of the transfer are.
For an example of a case where everything went wrong on a transfer see the recent Special Commissioners (non valuation) case of Colley and Hillberg (SpC 00483).
Harry
Harry J Ross is a tax specialist in practice in North London. He can be contacted by email at [email protected] or by telephone 020-8446 4193.
Harry hopes that the above posting is helpful. It is, however, unresearched. Accordingly, it cannot be guaranteed to be accurate or complete. It is given wholly without responsibility or recourse.
The...
...information requested by SVD does not seem unreasonable.
Difficult to say whether it is unusual because transfer of goodwill on incorporation of a musician must, itself, be fairly unusual because the goodwill is likely be entirely or almost entirely non-transferable personal goodwill inseparable from the individual (unless, of course, there are other aspects to his business than his personal performances).