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Morning all,

Father is sole trader and retiring and son is forming a new company and purchasing the goodwill.  As father's business was formed prior to 1 April 2002, is it a related party and no amortisation is allowable in company?  I think this is the case but cannot find a specific example like this, only for incorporations being related parties.

Any comments appreciated. 

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By andrew.hyde
20th Feb 2014 12:53


This is a tortuous route that ends in disappointment I think

Under S835(5)(a) CTA 09 an associate of a participator in a close company is a related party to that companySon will be a participator in the close companyFor a definition of associate, S841(3) points you to S448 CTA 10......which confirms relatives are associatedS448(2)(b) confirms that parents are relatives

So dad is related to son's company, assuming (which I think we can) the company is close, and S884...1(a) CTA 09 says that the goodwill as treated as created before 01/04/2002 and therefore not within the intangibles regime under S882(1).  Easy peasy.

Unless of course someone knows better.


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By Rammstein
21st Feb 2014 09:22


Andrew, cheers for your detailed reply, it matches what I thought.

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