Goodwill amortizsation - tax deductible?

Posted by acc12345 PM | on Sun, 03/02/2013 - 10:05 743 10 comments | report

I’m a director of a limited company (Co1), although do not own any shares. I want to form a new ltd company (Co2) and purchase the goodwill from Co1, for say £1.5m, which will be amortized over 10 years at £150k per annum. Co1 was formed in 2009, having purchased the goodwill of one of the directors (not me) personally (which he traded as a sole trader for some 20 years before).

Am i correct in saying that the purchase will be form a connected party (due to then common directorship) but that as Co1 was formed after April 2004, Co2 can use the £150k annual amortization as a tax deductible expense (i.e reduce profit and corporation tax)?

Comments

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BKD | Sun, 03/02/2013 - 11:23

Thank you for your reply. So

acc12345 | Sun, 03/02/2013 - 11:27

Eh?

George Attazder | Sun, 03/02/2013 - 11:47

It is a service business and

acc12345 | Sun, 03/02/2013 - 11:51

Common control ...

BKD | Sun, 03/02/2013 - 11:58

The whole businss will be

acc12345 | Sun, 03/02/2013 - 12:04

I can't see any problem then

George Attazder | Sun, 03/02/2013 - 12:20

sorry, the (not me) and (me)

acc12345 | Sun, 03/02/2013 - 12:24

Significance of "not me"

nogammonsinanundoubledgame | Mon, 04/02/2013 - 08:26

''not me'' is not connected

acc12345 | Mon, 04/02/2013 - 09:05