Is goodwill tax deductible in CT600

Can you please clarify what happens if the goodwill is acquired after 1 April 2019

Didn't find your answer?

Client a LTD Co, bought a shop for £125k

F&F £80,000

G.Will £45,000

We have ammortised the goodwill  as per FRS 102 over 10 years.

£45,000/10/12*3 = £1.125.00

The £1,125 was added back for corporation tax purposes (not allowed), Is this correct? or is goodwill amortisation allowable.

Is the 6.5% neccesary in this situation? Per 2019 Rules IP

Presumably in the case of no IP, when the goodwill is sold any profit is taxable with the trading profit and any loss is allowable as a trading loss

Also, as an when the shop is sold sometime in the future will the gain be calculated based on the disposal minus base cost at aquistion/ or the disposal minus (base cost  minus ammortisation, the value on the balance sheet)

Thanks in advance

 

 

Replies (5)

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By Ruddles
13th May 2024 15:59

Client a LTD Co, bought a shop for £125k

F&F £80,000

£45,000

So the property itself cost nothing?

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By KP2019
13th May 2024 16:02

Per the completion statement from the solicitors no lease premium was paid to the previous owner.

A new operating lease was negotiated with the Landlord.

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Replying to KP2019:
By Ruddles
13th May 2024 16:28

So they didn't buy a shop. They bought a business.

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By KP2019
13th May 2024 16:30

Yes, indeed.

My belief is that

On disposal of acquired goodwill the gain is basically proceeds less cost.

There should be no complication of amortisation as no qualifying intellectual property was purchased from the information received. Would you agree??

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