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Purchased goodwill husband and wife's businesses

Purchased goodwill husband and wife's businesses

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My clients (husband and wife) run a number of small businesses. Recently one of the businesses was split and part of it taken on by the wife through her own company.

The original business (limited company) was jointly owned by husband and wife and other shareholders with wife's share 24%. The new business (limited company) is 100% owned by the wife. Is the amortisation of purchased goodwill in the wife's new company allowable for tax purposes or is this transaction regarded as between connected parties?

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By blok
11th Jan 2011 13:30

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Confused slightly..

Was a new company formed to purchase the goodwill from an existing company?

If so who exactly owned the shares in the old company?

How long had the oldco been traidng for ?

 

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By jlhall
11th Jan 2011 21:17

Blok clarification

The old company had been trading for several years. The husbands shareholding was 51%, wife's shareholding 24% and remainder with other unrelated parties.

The new company was set up to separate out the business activities, not with the intention of purchasing the goodwill. The goodwill arises from internet domain names, web sites, clients etc. The issue came up doing the new company year end accounts and adjustment to put costs with relevant business.

 

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By blok
12th Jan 2011 09:19

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what does "taken on" mean?

Was this done with no consideration paid and for the benefit of the trade?

 

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