In Mertrux Ltd v HMRC (TC01253 – 13 July) a company (M) had carried on a business of selling Mercedes cars.
In 2003 it sold this business in return for consideration of £1 705 502.
M claimed rollover relief on the basis that the gain arose from the disposal of its goodwill.
HMRC disallowed 50% of the claim on the basis that only 50% of the consideration should be treated as attributable to goodwill and that 50% was compensation for the loss of M’s agreement with the car manufacturer which did not qualify for relief under TCGA 1992 s 155. M appealed.
The First-tier Tribunal allowed the appeal. Judge Radford held that the purchaser ‘had no reason to pay compensation for the loss of the dealership’.
The whole of the consideration...
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In Mertrux Ltd v HMRC (TC01253 – 13 July) a company (M) had carried on a business of selling Mercedes cars.
In 2003 it sold this business in return for consideration of £1 705 502.
M claimed rollover relief on the basis that the gain arose from the disposal of its goodwill.
HMRC disallowed 50% of the claim on the basis that only 50% of the consideration should be treated as attributable to goodwill and that 50% was compensation for the loss of M’s agreement with the car manufacturer which did not qualify for relief under TCGA 1992 s 155. M appealed.
The First-tier Tribunal allowed the appeal. Judge Radford held that the purchaser ‘had no reason to pay compensation for the loss of the dealership’.
The whole of the consideration...
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