Q&As

Will a disposal of internally generated goodwill upon the sale of a business be taxed as a capital gain or as trading profit? The business began trading in 2007 and the goodwill has a value attributed to it.

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Published on: 15 August 2019
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Part 8 of the Corporation Tax Act 2009 (cta 2009) is a specific corporation tax regime that applies exclusively to the gains and losses of intangible fixed assets (IFAs). An IFA is an intangible asset created or acquired by a company for use on a continuing basis in the course of the company’s activities. The IFA regime also covers goodwill, specifically including internally generated goodwill unless this was created by a business that was carried on before April 2002.

The Finance Act 2015, Finance (No 2) Act 2015 and Finance Act 2019 introduced restrictions on the availability of certain debits under the IFA regime

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Jurisdiction(s):
United Kingdom
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Key definition:
Goodwill definition
What does Goodwill mean?

The value attributed to the fact that the company is continuing to write profitable new business. It is often calculated as a multiple of the value of new business written in the most recent financial year.

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