The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Sales or acquisitions of businesses are likely to include the transfer of intangible fixed assets (IFAs) such as goodwill and / or other intellectual property.
The accounting definition of IFAs (other than goodwill) is set out in FRS 102, s 18.2 and is ‘an identifiable non-monetary asset without physical substance’. IFAs have a continuing use in the company’s trade.
Goodwill is covered by FRS 102, s 19.22. Goodwill is measured at cost, defined as the excess of the cost of the business over the acquirer’s interest in the net amount of identifiable assets, liabilities and contingent liabilities, measured in accordance with the rules within that section.
Goodwill may be personal, connected with the premises (for example a hotel), or associated with the brand or trade name. There are many other types of intellectual property such as patents, know-how, designs, processes and customer lists.
This guidance considers some of the relevant tax issues arising on a transaction structured either as a transfer of trade and assets, or as the sale of shares in a company which owns goodwill or other IFAs.
The rules governing the taxation of IFAs have been subject to several changes, so it is important to be aware of the dates of acquisition or creation of the IFAs in question.
The tax treatment of IFAs acquired from an unconnected party after 1 April 2002, follows the accounting treatment of credits and debits arising from those assets. In other words, credits are taxable and debits deductible. However, for goodwill and customer-related intangibles acquired on or after 8 July 2015 and before 1 April 2019, tax relief has been severely curtailed, as relief is denied for any amortisation or impairment (accounting debits) of those
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
VAT fuel scale chargesWhat are fuel scale charges?The VAT fuel scale charge is a simplified method that can be used by a business that funds both business and private mileage costs for employees to account for any output tax due on the private use of the vehicle. The charge was introduced to
IntroductionThe CFC rules as outlined in this note apply to accounting periods beginning on or after 1 January 2013, the date upon which significant changes made by Finance Act 2012 became effective.From this date, the CFC rules also apply to foreign branches in respect of which an exemption
This guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax liability falls on the trustees
If the self assessment tax return shows that a repayment is due, the taxpayer can claim a repayment or leave it as a credit on their statement of account.The quickest and safest method is for HMRC to make the payment direct to the taxpayer’s bank or building society account and so they are asked to