My boss is on a Tax update course today and a client has rung up with the following query, I have said that we would ring them back tomorrow - but wanted to research the correct answer for my knowledge.
Query on the sale of Goodwill, the scenario is:
Goodwill on Incorporation £ 100k
2 x Years of Amortisation = £ 20k
Value at Start of year 3 = £ 80k
In Year 3, part of the business is sold (The Goodwill / No Assets) to the value of £ 50k.
I am unsure if I should:
a.) Amend the Goodwill value in the balance sheet and then all future years of Amortisation;
or b.) Is it a taxable amount for Corporation Tax as it's an income.
No there is no CT because its not income but a loss on sale of asset. If the amortisation was allowable for CT purposes (as its not always), then the loss will also be allowable.
