Successful free house pub purchased in 2007 for £580k. Building valued at £400k, recently refurbished interior and catering kitchen valued at £80k, successful business with good reputation resulted in goodwill of £100k.
Fast forward to 2018 - freehold building retained, but pub business sold on a 10 year lease to a new operator for £40k. NBV of F&F was c.£8k and nbv of goodwill remained at £100k. Rights to the business pass to the new operator as due the f&f. As such £108k written off to the P&L offset by £40k proceeds.
Question is how is the goodwill and small F&F write down treated in the corp tax computation?
Thanks
Replies (1)
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https://www.taxinsider.co.uk/285-How_Adherent_is_Your_Goodwill.html
Worth reading, I suspect the £40k is a lease premium.