Goodwill: Sole trade to Partnership to Ltd Company

Hello

 

Please could someone point me in the right direction regarding my query...

 

In simple terms, my father commenced as a sole practioner some 20+ years ago after initially purchasing a small client base for lets say £1k which was classed as goodwill in his accounts.

 

Around 5 years ago, I joined forces with him, along with a fellow family member and we formed a new partnership. The assets of the sole trader, including the £1k goodwill were transferred into the partnership... the goodwill at this point would have had a value of, say £30k.

 

The client base has grown since 2007 and we have recently taken the decision to form a Ltd Co. The assets of the partnership wil be sold to the Ltd Co and these will include goodwill now valued at approx £80k.

 

Now, I am aware that goodwill created after Apr 2002 creates an allowable tax deduction equal to the amortisation charge - and my question is... could the "goodwill created wholly after Apr 2002" be classed as £50,000 (IE. £80,000 less £30,000) and a tax deduction claimed for the amortisation charge over the next however many years?

 

Or, am I on the wrong track?

 

Thank you for any help, relevant guidance.

 

 

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sole trader to partnership to lt company

woody12 |