Relief on goodwill

Revenue & Customs Brief 25/11 affirms HMRC’s view that no relief is due in circumstances where it is claimed that goodwill is created out of synergies realised as a consequence of the acquisition.

The department has previously stated it would challenge past claims with a view to litigation where there are arrangements to claim tax relief for goodwill under the corporate intangible fixed asset regime where a company has acquired a business that was carried on by a related party before the regime took effect on 1 April 2002.

A recent Upper Tribunal (Tax and Chancery Chamber) case on goodwill Greenbank Holidays Ltd v CRC was decided in favour of HMRC.

Comments in the judgment indicated the approach that a tribunal may take in relation to goodwill arguments where benefits might arise from the acquisition or merger. Both...