Goodwill calculation
Antoinnette
Registered Posts: 118 Beyond epic contributor 🧙♂️
I am in the process of incorporating our partnership. It organises CPD workshops for complementary therapists and also offers bookkeeping and accounting services to said therapists. All assets have been fully depreciated so there is none to transfer. However there is a 2000 odd database of therapists and this will transfer to the ltd company. There will be no debtors or creditors to transfer
Do I need to calculate goodwill and do I need to send this to HMRC to check?
Thanks
Do I need to calculate goodwill and do I need to send this to HMRC to check?
Thanks
0
Comments
-
Antoinnette wrote: »I am in the process of incorporating our partnership. It organises CPD workshops for complementary therapists and also offers bookkeeping and accounting services to said therapists. All assets have been fully depreciated so there is none to transfer. However there is a 2000 odd database of therapists and this will transfer to the ltd company. There will be no debtors or creditors to transfer
Do I need to calculate goodwill and do I need to send this to HMRC to check?
Thanks
You don't need to calculate goodwill as you can claim incorporation relief.
However if your partnership began after 31/03/2002 (when the intangible asset regime began) then it can be particularly tax efficient to calculate goodwill and:
1) Gain an allowable deduction by amortising (i.e. depreciating) the goodwill, and
2) Crediting the director's loan account with the goodwill.
It is best practice to confirm the goodwill figure with HMRC by completing Form CG34 and paying any capital gains tax.
Accountants firms normally value their practices at 1.25 times of turnover, other businesses may value themselves at 1.5 times of net profit. Valuations vary from business to business and depend on the sector, past performance of the unincorporated business, market value, etc.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 322 NEW! Qualifications 2022
- 159 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 93 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 274 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership