UT upholds FTT decision on principles of valuation and allocation of consideration in acquisition of care homes (Nellsar v HMRC)
Tax analysis: In Nellsar, the Upper Tribunal (UT) dismissed both parties’ appeals and affirmed the decision of the First-tier Tax Tribunal (FTT). In the context of acquiring care homes as a going concern, the purchase price should, on the basis of accounts compliant with generally accepted accounting principles (GAAP), be allocated to the care home properties using market value rather than depreciated replacement cost (DRC) for the purposes of corporation tax relief on amortisation of goodwill under the intangible fixed assets (IFA) regime and for the purposes of SDLT.