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On sale of company assets what is the best way to Split goodwill and FA?

On sale of company assets what is the best way...

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Hi All,
I would like some re-assurance or otherwise!:
My client is selling his limited company by way of an asset sale. (yes tax wise, a share sale was recommended, but the buyer is willing only to buy the assets and this is taken into consideration in the price).
My clients solicitor is asking for a breakdown between goodwill, freehold property and fixtures & equip.
I have the property valuation from the surveyor and the tax written down values of other assets, so the balence will be goodwill? Or is there any other way?
I just want to make sure Im not missing a trick here, as in my mind it makes no difference to my client how the assets are split as the company will pay CT on the net gain anyhow.

Your comments are much appreciated,

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By cfield
26th Feb 2012 11:58


You're right, goodwill is the balancing figure, but the fixed assets should be at their commercial second hand value, not tax written down value. For example, if your client claimed the annual investment allowance on assets purchased in recent years, there would be no tax WDV, but obviously the asset still has value.

Your client might also have an intangible asset which increases in value such as a website or a trademark. If the website gets good traffic, it might be worth more now than your client paid for it.

You should also probably discount the debtors for any notional risk of non-payment.


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