Nellsar Ltd v HMRC [2023] UKFTT 718 (TC) (11 August 2023) concerned a corporation tax deduction for goodwill acquired on the purchase of care home businesses including their properties. The FTT held that open market fair values (and not the depreciated replacement cost used by the taxpayer) of the land and buildings could be determined by reference to an adjusted operational entity valuation and this would enable the valuation of goodwill.
The appellant had acquired residential care and nursing homes as going concerns under five transactions. In the relevant purchase agreements an amount of the purchase price for the respective businesses was attributed to goodwill. HMRC raised discovery assessments and issued closure notices imposing additional corporation tax liabilities on the basis that the amounts properly attributable to goodwill in respect of the acquisitions was lower than the amount included in the appellant’s...
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Nellsar Ltd v HMRC [2023] UKFTT 718 (TC) (11 August 2023) concerned a corporation tax deduction for goodwill acquired on the purchase of care home businesses including their properties. The FTT held that open market fair values (and not the depreciated replacement cost used by the taxpayer) of the land and buildings could be determined by reference to an adjusted operational entity valuation and this would enable the valuation of goodwill.
The appellant had acquired residential care and nursing homes as going concerns under five transactions. In the relevant purchase agreements an amount of the purchase price for the respective businesses was attributed to goodwill. HMRC raised discovery assessments and issued closure notices imposing additional corporation tax liabilities on the basis that the amounts properly attributable to goodwill in respect of the acquisitions was lower than the amount included in the appellant’s...
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