Apportionment between the heritage and the moveable

Apportionment between the heritage and the...

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Dear all

I hope you could help me about this problem

I have a client who is willing to purchase a guest house as a sale price of £185,000.

My client will not operate the business as a guest house; he would like to rent it out as multiply occupier. (He and his family will also live in the house).

The sellers wished to dictate the apportionment of the price by saying £85,000 is apportioned to heritage (which seems very low) £5,000 towards fixtures and fittings and a whopping £90,000 towards goodwill.

My own view was that these terms are not acceptable. This does not appear equitable and I suggested not to purchase in this apportions.

So my questions are;

What are the consequences if apportioned the sale price of £180,000 in to the £85,000 heritage, £90,000 goodwill and £5,000 as fitting and furniture?

Client will not operate as same business, so what is the affect of paying for goodwill? What are benefits of not paying for goodwill?

What about the capital gain tax, one day when he sold the property? This property will be his resident house also will be rent it rooms out as multiply occupiers.

Which is best apportioning? All sale price as heritage and the moveable and ignore the goodwill and pay SDLT?

OR considering some goodwill and not paying Stamp Duty? But I am consider if one day client sale the property how much affect that goodwill have on capital gain tax?

Any suggestions or alternative apportionment between the heritage and the moveable for the sale price?

I am looking to hear your valuable suggestions. Thanks

      

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