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.
- When to include value of import in Box 7 56 1
- employer pension contributions - OMB company 157 2
- Accounts production software license expiry & possible alternatives 292 7
- Capital gain? 65 3
- Are clients getting more stupid? 1,240 21
- Construction Industry Allowable expenses 258 8
- Recharge for private use of a company car 345 8
- How could I be identified for VAT purposes in UK? 411 8
- vat help for catering concession 272 10
- IHT dilemma 1,152 17
- Tax return software for remote working 228 3
- CGT 329 14
- Problems with Sage 50 Payroll v21(2015) pension module 314 1
- Interest paid to non-UK company - Deduction 106 2
- Compliance check 504 13
- sole trader accountant 781 14
- Entrepreneurs Relief 397 15
- Capital Allowances and Building Improvements 602 21
- More AE! 492 11
- How to classify an asset 154 3
- Auto enrolment excuses 1,078
- Feedback on accounts production software for IFRS 776
- Add T&Cs to Sales Order in Sage 460
- Digita Hosted Software 278
- Call Centre Data Costs 247
- Are any of you agents for doctors? 222
- Credit where credit's due....... 213
- Buying goods in US and selling them to company in US 203
- Married Couples Allowance wasted? 184
- Director phone costs 145