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• # 83709
• Tue 03 Jul 2012 09:52 PM

Hi All


I have a client that I am doing the books for/ Tax return and when he took on the business he paid someone £3000 goodwill as he inherited some clients ect.

Am I correct in thinking that this is written off as an expense in the first year and can be claimed in FULL as an expese on the tax return.


Also what code should i enter it under in SAGE?

Many Thanks for anyones help    

• Aaron Lilley
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• # 83744
• Thu 05 Jul 2012 08:23 AM

Hi Aaron

Please check this with ICB techincal team but I was under the impression goodwill was assessed under CGT for personal tax. Therefore i would capitalise as an intangible fixed asset and assess under CGT pages of SATR when disposed of. I don't think there are any capital allowances available for goodwill.

If your client is a company, the goodwill needs to be capitalised and amortised under FRS and if the goodwill is created after April 2002 the amortisation can be tax deductible. 

Have dragged this up from deep in the files of my brain so please check but felt as you didn't have any other answers i would throw this out there especially as it differs quite significantly from your initial thoughts.

Good luck

Georgina 

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• # 83748
• Thu 05 Jul 2012 11:16 AM

Hi Aaron,

This is good technical question....

@Georgina...The process you advised is correct, in my opinion.
Goodwill does not qualify as Capital Allowance.

I Suggest you get help from technical team eventually they will confirm Georgina and mine thoughts on this.

Please keep us posted on the outcome.

Kind Regards,

Nathalie K

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