Client has £130k of goodwill on incorporation. Under current accounting standards this must be amortised at around 10 years. This means the client will be cash rich and profit poor.
Obviously you need profits to declare dividends but the client is keen to get his hands on the cash. Can I do a capital reduction (huge share premium reserve)?
In an ideal world the valuation on incorporation would have been lower...
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Then the problem is the advice to pay for the goodwill by issuing shares. The easiest thing in the world would have been to credit the goodwill to a loan account which he could have been happily still drawing.
Non-tax issues in this scenario are discussed at some length in Q3 Accounting TV.
I agree re s162 - unlike, presumably, John, not everyone can afford (or wants) to pay CGT on incorporation.