Q&A: rollover relief, goodwill and tax

In this week’s Q&A, David Lawson, tax adviser at Croner VIP Tax Team, explains rollover relief for intangible fixed assets and goodwill

Q:  I have a client company that has built up a substantial trading business since starting up in 2018. It is contemplating the sale of its goodwill at £300,000, and is questioning the corporation tax implication, especially as there are no values in the balance sheet. Is there any relief available if the company now acquires goodwill of a new business for £450,000?

A: For the creation or acquisition of goodwill post April 2002 it is treated as an intangible fixed asset (IFA) for the purposes of corporation tax.

All references in this article relate to Corporation Tax Act 2009 (CTA 2009).