Intangible fixed assets: goodwill acquired from related party
In Blenheims Estate and Asset Management Ltd v HMRC (TC02696 – 17 May) a trader (M) formed a company (B) in 2006. B purchased the business which M had previously carried on issuing shares in return. M subsequently sold the shares in B to an unrelated company. In 2008 B claimed a deduction for the amortisation of the goodwill which it had acquired from M. HMRC rejected the claim on the grounds that M and B had been ‘related parties’ at the time of the acquisition so that the deduction was prohibited by what is now CTA 2009 s 882(1)(b). The First-tier Tribunal dismissed B’s appeal against this decision finding that M had been a participator in B at the time when B acquired the goodwill from him.
Intangible fixed assets: goodwill acquired from related party
In Blenheims Estate and Asset Management Ltd v HMRC (TC02696 – 17 May) a trader (M) formed a company (B) in 2006. B purchased the business which M had previously carried on issuing shares in return. M subsequently sold the shares in B to an unrelated company. In 2008 B claimed a deduction for the amortisation of the goodwill which it had acquired from M. HMRC rejected the claim on the grounds that M and B had been ‘related parties’ at the time of the acquisition so that the deduction was prohibited by what is now CTA 2009 s 882(1)(b). The First-tier Tribunal dismissed B’s appeal against this decision finding that M had been a participator in B at the time when B acquired the goodwill from him.
