Can we have our cake and eat it?

deanshepherd

Mr X has a successful trading company (A Ltd) that he is going to sell to an existing employee, Mr Y.

Mr X wants the gain on him (and his wife) personally so wants to sell shares rather than assets.

It would be nice if Mr Y could get tax relief on the goodwill acquired but I cannot see a way of doing it.

The likely scenarios are either:

1) Mr Y simply buys shares in A Ltd = (No goodwill on balance sheet, therefore no amortisation);

2) Mr Y forms B Ltd which acquires shares in A Ltd. We then hive up the assets into B Ltd and close down A Ltd. (Again, does not appear to be any relief available for price paid over and above fair value of net assets of A Ltd).

Is there an option 3 that gives Mr X a gain in his own hands, yet also creates allowable goodwill for Mr Y's new company?

Answers on a postcard please!

Monsoon

If I have cake, then I want to eat it, not look at it.

I don't know.

I read a passing comment on a thread elsewhere the other month that there are ways of structuring business sales that can work to the advantage of everyone but the tax man, but I'm not privy to these clever schemes. The claim that stuck in my head was that the buyer pays less, but after tax the seller receives more than if it was a standard sale.

It might be worth talking to someone like Cathy Grimmer at Raven Taxation, she might know this kind of clever stuff.

Bluewednesday

I don't know, I looked at this specifically hoping that it was about cake and now I'm disappointed!

Monsoon

lisar1610

Fantastic!!!!!

deanshepherd

Monsoon wrote: »

It might be worth talking to someone like Cathy Grimmer at Raven Taxation, she might know this kind of clever stuff.

Thanks Monsoon, I'll pass those details on..

..and as for the cake..

..a client of mine makes cakes like this..

Monsoon

Dude, that's badass!

I want a gorilla cake!!!!

deanshepherd

I thought road kill might be more your thing..

I won't post the image direct in case it offends!

(Only look if you dare..)

Monsoon

No. I love teh animals.

Those cakes are cool, but pretty gross