Re: the sale of goodwill

H

hizzy

Registered User
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189
Hi All

I am self-employed in the services industry. At the moment I am sole trader. I have set up new ltd company to target the commercial side of my business, and I am transferring the commercial side of my first business to the Ltd company.

My question is this, can I charge the Ltd company anything for the goodwill of this business.

Many thanks

Hizzy
 
Hi Clubman

That I do, contacted them this morning, just waiting on them to speak to there Tax consultant, but was just wondering if it was possible.

Thanks

Hizzy
 
Yes it is but, if you are looking to get money out of the new company for this goodwill, you will be subject to CGT at 20%.
 
Hi Hizzy,

I'm interested to hear what you found out.
I've heard that the Ltd company can pay the Sole Trader up to 1.5 times the previous year's turnover for the goodwill, on acquiring the business.
The sole trader is then liable for CGT on this amount at 20%, and the Ltd Co then owes them for the cost of the goodwill.
How that money (goodwill cost) is then paid to the ex-Sole Trader (now Ltd director) and what TAX is due, I don't understand.
If you could pass on what you find out, that'd be great!
Thanks,

Gray.
 
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