I have a sole director Ltd Co client in the construction industry with 5-10 staff historically. I understand £60,000 goodwill was created on incorporation of the director's old partnership with his father in 2007. It has not been amortised and remains on the balance sheet at cost. The company is now ceasing and staff are being made redundant. The sole director is then commencing self employment as a contractor on a vastly reduced scale, with no staff and undertaking much smaller jobs. He is not taking over the business as a going concern and is only retaining minimal assets (tools etc) but will be using virtually the same trading name. The goodwill was related to larger scale construction work undertaken by the company and partnership before it as a longstanding business run by two generations of the same family.
Is it reasonable to say that the goodwill is now of negligible value? If so, the company accounts will show a loss. Can this be utilised in the same way as a trading loss or is it treated differently?