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Readers' forum : Bedside manner

26 September 2017
Issue: 4617 / Categories: Forum & Feedback

Structuring a company sale to acquire the goodwill of a business.

Further to the query ‘Winding it up’ (published with replies in Taxation 17 August 2017 page 24) we have a similar situation that is causing us concern. Our client is a sole practitioner medical professional and is seeking to sell his company X Limited to another corporate Y Limited.

X Limited has assets of: £150 000 old-style goodwill with a historical cost of £250 000; an overdrawn loan account of £150 000; and sundry creditors of £80 000.

As far as we are aware there are no CTA 2010 s 455 issues here. Y Limited a third party has agreed to buy X Limited for £400 000 to obtain the benefit of the goodwill of the business. To avoid having to pay a dividend to clear the overdrawn loan account we have suggested that our client X Limited ...

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