Public House Lease Disposal

Tax treatment for proceeds from a public house disposal

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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

 

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paddle steamer
By DJKL
13th Mar 2019 13:52

https://www.taxinsider.co.uk/285-How_Adherent_is_Your_Goodwill.html

Worth reading, I suspect the £40k is a lease premium.

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