Valuing Goodwill in a franchisee business and reliefs available.

My client has incorporated his sole trader business together with all the assets of the business including goodwill from 1/4/2010 and continues to work full time in the business as the only director and shareholder.

My thinking was to approach the franchisor and find out the market rate for buying  a new franchise and then add an additional element for the established client base and growing reputation.

My other approach was to take an average of the last three years net profit figures from the sole trader  business and  then add a P/E ratio of approx 2.

The business will also acquire some tax written down tangible assets which are below the annual CGT exemption figure.

Not sure if I need to inform HMRC or if this is automatically covered by Incorporation Relief under S 162 or is it better to elect for this not to apply and claim for Entrepreneurs Relief under section 169M TCGA 1992.

The figures are going to be below £50,000 with goodwill written off in a few years.

Thanks