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26 August 2014
Issue: 4466 / Categories: Forum & Feedback , Business , Employees , Income Tax

Is there a tax deduction for the legal costs associated with a transfer of employees?

Our client company recently took over the trade and assets of another business and incurred significant legal fees in connection with the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

Initial research would suggest that the cost of this element of the work is capital but that it cannot be added to the cost of any goodwill so there is no tax relief for the expense.

We believe that it is correctly a capital expense but cannot see that relief can ever be claimed even if it were treated as a revenue expense and therefore written off to the profit and loss account.

Query 18 441– Gone

Reply from Steve Kesby

I agree with Gone that the TUPE legal costs are a capital expense relating to the acquisition of the business. However I am not sure that they cannot be added to the...

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