Share this content

purchase of business - lease premium/assignment

lease premium tax treatment

Didn't find your answer?

I took on a client who has 'purchased' a child care business. She paid 30K to the previous owner who assigned the present lease (expiring in 3 years) to my ltd company client. The deal is that another 30K is payable to the previous owner once the present lease is extended by 10 years in 3 years time. solicitor contract states the purchase price apportionment is 30K goodwill, 30K assets

i would appreciate your thoughts on both the accounting and tax treatment.

thanks in advance

Replies (1)

Please login or register to join the discussion.

Psycho
By Wilson Philips
21st Jul 2021 12:57

Tax seems simple - looks like the company has paid £30k for goodwill and is paying £30k for the assignation of the lease, the latter being contingent on an extension of the lease term.

I'll let others comment on the accounting for the contingent liability.

Thanks (0)
Share this content