Hive up of subsidiary 's Good Will - tax

Hive up of subsidiary 's Good Will - tax

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Hello,

Company A is the Parent of Company B (subsidiary). 

Company B has Goodwill on it's balance sheet that is being amortised over 10 years and obtains 100% corporation tax relief on the amortisation charge each year, because it related to a purchase prior to the changes made on 7 July 2015.

Company A wants to have all of the assets of Company B hived-up to to it.  My concern is that if the Goodwill in Company B is transfered to Company A, they will no longer be able to get the corporation tax relief on the amortisation.  Is that correct, or will they still be able to under the rules that governed the taxation of the amortisation in the subsidiary?

Any advice is gratefully recevied.

M

Replies (2)

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Psycho
By Wilson Philips
05th Feb 2021 18:11

All should be good - A effectively steps into B’s shoes.

CTA 2009 ss775 and 776

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John Toon
By John Toon
05th Feb 2021 20:06

You may have additional goodwill to recognise on the hive up so the trick is to keep a seperate record to avoid messing up any tax claim in error post hive up

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