base cost of goodwill

goodwill

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Hi All

I have sole trader client who had existing goodwill of 100k, this business was incorporated,with goodwill valued at 200k.

My question is, will the base cost of goodwill be 100k(200-100) and would cgt be payable on the 100k?

Many thanks

 

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By Duhamel
31st Aug 2016 08:51

Depends how you have incorporated and if the goodwill is capable of being transferred.

If the goodwill has been 'sold' and can be transferred then yes, subject to annual exemption.

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Worm
By TheLambtonWorm
31st Aug 2016 09:01

Are you asking from the perspective of the previous sole trade, prior to incorporation?

If so, then yes, if the sole trade paid £100k for the goodwill and sold it to the new company at its market value of 200k, there would be a profit on disposal of £100k.

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