De facto transfer took place in December 2014

Up to December 2014 two partners carried on a dental practice business in partnership. They decided to incorporate so they set up 2 Green Smile Ltd for the purpose of succeeding to the business. The company’s accounts recorded that it started trading on 1 December 2014 providing dental services in succession to the partnership.

In the accounts for the year ended 30 November 2015 and in subsequent years the company claimed an amortisation debit based on the market value of the goodwill which it claimed to have acquired on or before 1 December 2014 as part of the business.

HMRC said the goodwill was acquired on 23 October 2015 - the date on which the contract for the provision of NHS dental services was novated to the company - so the amortisation debit was not available.

The company appealed. It claimed that by the end of November...