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 income. 436 20
- What sectors to target? 600 30
- FYAs on second-hand vans 247 7
- Rent a room scheme query. 175 3
- client can't/won't pay 1,926 41
- Self assesment online 983 11
- UKBA financial requirements for spouse visa 254 21
- Why do I do this every year 394 9
- Watch out self-assessment scam e-mail 297 5
- closing limited company 163 2
- VAT when selling on Amazon 82 1
- HMRC filing meltdown? 511 14
- Childcare voucher schemes 245 9
- IHT and US resident 58 1
- Limited Companies Merger 208 6
- Incidental costs of Acquisition for inherited property/shares 134 1
- Practice management 380 7
- IHT and cash gifts 245 5
- HMRC Sends Derbyshire pensioner Doug Yeomans tax demand for £4.7 BILLION! 555 13
- Pounds Shillings and Pence 1,601 42
- Form MR01 (Particulars of a charge) - does this need to be filed if you remortgage with the same lender? 926
- Underpaid VAT assessment and relation to SATR 645
- Did you realise Google will not patch android exploit ... 596
- Latest phishing scam 578
- Cashback for opening business bank acct = trading income? 413
- Auto Enrolment Questions Answered 310
- Scratch Head 239
- Loan benefit after person ceases as director/employee 229
- Sabbatical payments 195
- Negligible Value Claim 171