Scott Burkinshaw - 4 December 2014
In addition to the Capital Gains Tax Entrepreneurs’ Relief changes to restrict favourable tax rates on incorporating goodwill in a company, the Chancellor has also changed the way companies can claim tax relief on the goodwill purchased.
In certain circumstances the company could write off the goodwill against profits and therefore claim Corporation Tax relief on the write-off.
With immediate effect, no company will be able to claim a tax deduction for goodwill where it was bought from an individual or partnership and transferred to a company owned by the seller of the goodwill.
This removes a further benefit of incorporating a sole trade or partnership so it is important that careful consideration is given to both commercial and tax issues prior to incorporating your business.
Contact Scott Burkinshaw for details of how this might affect you.
Scott is Tax Partner at Shorts, specialising in providing strategic corporate and personal tax advice.
View my articlesTags: Business Taxes
Written especially for entrepreneurs and owner-managed businesses, this guide is full of planning ideas and tax risks to avoid.
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