A client (a limited co) is buying a fast food franchise as a going concern from an existing franchisee (sole trader).
The purchase is broken down as follows:
Goodwill: £14,999, Chattels £105,000 and lease £1.
My question is, in the eyes of the buyer does the break down between Goodwill and Chattels make any difference?
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Replies (5)
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Chattels?
Surely when buying a fast food franchise you would be looking to maximise the amount which would relate to fixtures and fittings, or plant & machinery, for a capital allowances claim , goodwill and chattels will not get you any tax relief
Chattels?
Surely when buying a fast food franchise you would be looking to maximise the amount which would relate to fixtures and fittings, or plant & machinery, for a capital allowances claim , goodwill and chattels will not get you any tax relief
Yes 'Chattels' was the wording from the solicitor - I just assumed it was the legal way of saying Fixtures and Fittings. I will get my client to ask the solicitor why this has been used.
Thanks for the advice re goodwill and that it is no longer tax deductible.
Chattels probably does include fittings and any machinery not bolted down, but it will not include fixtures as these belong to the landlord and therefore are not the tenants to sell.
Well, debate on chattels apart (I'd've claimed and not even given it a second thought, to be honest), yes - it makes a huge difference whether it's goodwill or chattels.
What a strange question.
Tax relief on goodwill is sometime/never.