Updated July 2015
This article was updated just days before the Summer Budget which took place on 8 July 2015. It is now the case that a company acquiring a business will no longer be able to claim tax relief on goodwill being amortised in the accounts. This is irrespective of whether the business was acquired from a related party.
In this article we are going to take a closer look at the new rules which seek to restrict tax relief for goodwill when a business is sold. These restrictions were announced in the recent Autumn Statement, and have since become law, being incorporated into the first Finance Act of 2015. The new rules are aimed at individuals or partnerships who decide to incorporate their business. What is striking is that the new rules go further than the mischief that they are intended to counteract.