Since 6th April 2008 and until 3rd December 2014 Sole Traders and Parternships were able to claim Entrepreneurs Tax Relief on Goodwill when becoming a Limited Company.
Until the 3rd December 2014 they would claim there Capital Gains Allowance
| Period | Tax-free allowance |
|---|---|
| 5 April 2013 to 6 April 2014 | £10,900 |
| 5 April 2014 to 6 April 2015 | £11,000 |
Then claim ER which reduced the rate of tax to 10% on the gain.
But from the 3rd December they will now pay Capital Gains at the normal rates of CGT which are 18% or 28% (for Higher Rate Income Tax Payers).
This doesn’t change the potential ability of the company to offset goodwill against their Corporation Tax Return.
There are still other benefits related to goodwill as explained in this blog
The tax benefits of goodwill on incorporation?
steve@bicknells.net
Business Accountant 