Summer Budget 2015 – Goodwill Regained – but for how long?

 Corporate Tax, IP Tax  Comments Off on Summer Budget 2015 – Goodwill Regained – but for how long?
Aug 142015
 

In a previous article we saw how the Government spoilt everyone’s fun by abolishing corporate tax relief on goodwill when acquiring a business. But there may be a silver lining to our goodwill cloud, though how long this will last remains to be seen.

(This article can be downloaded in pdf format at Academia.edu.)

Continue reading »

Rollover Reliefs and the Replacement of Business Assets Part Three – Rolling IP into Shares

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on Rollover Reliefs and the Replacement of Business Assets Part Three – Rolling IP into Shares
Feb 222015
 

This is the last article in our series on asset rollovers. In Part One, we looked at capital assets, in Part Two we saw how IP rollovers work. In this part we shall see how it is possible to sell an IP asset and defer the tax by reinvesting the proceeds in the shares of a company, effectively looking through the corporate vehicle to the underlying IP that it holds.

(This article can be downloaded in pdf format at Academia.edu.)

Continue reading »

Rollover Reliefs and the Replacement of Business Assets Part Two – IP Rollovers

 CGT, Corporate Tax, IP Tax  Comments Off on Rollover Reliefs and the Replacement of Business Assets Part Two – IP Rollovers
Feb 202015
 

This is the second article in our series on asset rollovers. In Part One, we looked at capital assets, in this part, we shall look at IP (we shall use the term IP to cover all intangibles including goodwill).

(This article can be downloaded in pdf format at Academia.edu.)

Recall that a rollover is a means of deferring tax when a business asset is sold and replaced with another. The idea is that since the sale proceeds have been reinvested, the tax doesn’t become due until the second asset is sold and the funds become available.

Continue reading »

Rollover Reliefs and the Replacement of Business Assets – Part One – Capital Assets

 CGT, Corporate Tax  Comments Off on Rollover Reliefs and the Replacement of Business Assets – Part One – Capital Assets
Feb 092015
 

This is the first in a series of articles about asset rollovers, a tax relief available to businesses when one trade asset is exchanged for another. There are two types of rollover, one for capital assets such as land, the other for intangibles such as IP and goodwill (which we shall refer to collectively as IP).

Both types of relief are similar in their operation, but as we shall see, there are important differences. In this article we shall be concentrating on capital assets.

(This article can be downloaded in pdf format from Academia.edu.)
Continue reading »

Entrepreneurs’ Relief and Goodwill – what did the Autumn Statement say?

 CGT, Corporate Tax, IP Tax  Comments Off on Entrepreneurs’ Relief and Goodwill – what did the Autumn Statement say?
Jan 252015
 

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. Continue reading »

Incorporating Goodwill – Can you claim tax relief when you become a company?

 Corporate Tax, IP Tax  Comments Off on Incorporating Goodwill – Can you claim tax relief when you become a company?
May 052013
 

One of the key tax issues when a sole trader or partnership incorporates an existing business is the treatment of goodwill. In particular, can the new company claim tax relief for writing down the goodwill after acquiring the business?

This should be possible for those who started business recently – by which we mean, those businesses set up from 1 April 2002 onwards. But if your business is more established, then we have a problem…

UPDATE From 3 December 2014 it is no longer possible to claim tax relief for internally generated goodwill in line with the accounts when incorporating a business. This is due to the announcement in the Autumn Statement of 2014 restricting deductions for goodwill when a close company acquires a business from an individual or partnership, and the company is related to the seller(s). 

However, the following article is still relevant to the question of when a person becomes entitled to shares in a company that are to be issued to him under a contract.

Continue reading »