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The taxpayer started his accountancy business in 1981 with no goodwill. He transferred the business in 2003 to a connected company and became liable to capital gains tax on the proceeds.
As a result of the indexation revaluation rules in TCGA 1992 s 35(2) the base cost of the goodwill on disposal had to be the value at 31 March 1982.
In his return for 2002/03 the taxpayer said the value was £516 940 but HMRC claimed it was £75 000 and amended his return to reflect the lower amount.
The taxpayer and the Revenue agreed that the value of the taxpayer’s share of the business in April 2003 was £1.4m and the department accepted the estimate of the goodwill at that date.
The taxpayer later wished to amend his appeal to include evidence in relation to the 2003...
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