Greenbank Holidays Ltd v HMRC

Business tax: Intangible fixed assets

In Greenbank Holidays Ltd v HMRC (TC00416 – 26 March) a company (G) purchased the goodwill of another company (K) in the same group. In its corporation tax return G claimed a substantial deduction for the cost of the goodwill it had acquired from K. HMRC rejected the claim on the grounds that it failed to meet the statutory requirements of FA 2002 Sch 29 para 118 (see now CTA 2009 ss 881 882). The First-Tier Tribunal dismissed G's appeal against this decision. The tribunal specifically rejected G's contention that the statutory references to 'goodwill' should be restricted to 'purchased goodwill'. Sir Stephen Oliver observed that 'the use of the expression “amounts representing goodwill” demonstrates that there is a relevant statutory concept of goodwill. It goes wider than purchased goodwill.'

Why it matters: For the purposes of the...