Buying and selling a practice: tax implications of buying a practice

摘要

Michael Bennnett offers his advice to private practitioners who are thinking about buying or selling a practicernIn this article, Michael discusses the tax implications of buying a practice.rnFor the buyer the acquisition of a practice needs to be broken down into three separate and distinct areas. Firstly there is the goodwill itself, secondly there may be some equipment associated with the premises and thirdly it may involve acquiring the freehold of the premises, or taking on a lease or a licence.rnGoodwill. The tax treatment here depends on what trading entity you buy it as and what relationship the buying entity has to the selling entity (please excuse the jargon!). A sole trader cannot get any tax relief for buying goodwill. All that happens is that an acquisition value is established that will come into the calculation of Capital Gains Tax if the goodwill is sold on to another party at some later date. The same applies if you are buying as a partnership or joint venture.