HM Revenue & Customs has issued new guidance on its website in the form of a background and practice note, which states its current thinking with regard to the taxation of goodwill. This covers capital gains tax (CGT), stamp duty land tax (SDLT) and corporation tax. However, the overriding message is that there is no right answer and the position may change once HMRC negotiates further cases. Further to the decision in Balloon Promotions Ltd v Wilson, HMRC and taxpayers have continued to disagree in relation to how sums paid in transactions involving businesses carried out from 'trade related properties' (eg, public houses, hotels, petrol filling stations, cinemas, restaurants and care homes) should be allocated between that which would previously have been labelled as different categories of goodwill (eg, adherent and inherent goodwill).
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