Goodwill and incorporations
Here is a scenario which has not happened to me (yet!) but I have been thinking about recently.
Very profitable Business incorporates.
Accountant assists client with goodwill valuation, and a substantial directors loan account is created. The valuation utilises a multiple of owners benefit of 2-3 times.
Amortisation is claimed as a deduction in the company P&L.
Some years later the company successfully disposes of the business to a third party for eight times profits. A substantial corporation tax bill results.
The director is unhappy as he has sold the business to the company too cheaply. Overall the company and director have paid more tax than the optimum amount.
Director sues the accountant.
- Non-Resident Director - UK Tax Position? 399 4
- Employment support allowance and self employed 130 3
- Company pays me the mileage rate of a company vehicle 97 1
- Registered Office 151 3
- PAYE coding notice - deliberate misstatement 1,485 23
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- Owners loan to business - is interest taxable 112 2
- Would this save hours of your time? 689 12
- Audit Required 1,187 22
- HMRC to sell our tax data to private companies 308 9
- Residential Management Companies 93 2
- Value pricing 2,856 37
- Problems with CT600 filing 397 5
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- Excel problem - pivot tables and multiple data sources 218 5
- CIS and Close Company 209 6
- Residential Property Purchase Above £750K 945
- Using Sage with Sofa Categories 661
- Understanding the implications of January 2015 VAT changes for downloads on threshold for VAT registration 399
- transferring simply accounting 2010 from xp to windows 7 332
- rent-a-room allowance for part of the year 261
- HMRC Second Income Campaign - not so much a question as heads up 251
- Paye procedures for CVA 251
- Expenses Re-imbursed on the VAT Flat Rate Scheme 200
- Compliance Checks - Time limits 193
- Pension Fixed Protection 189