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Goodwill Question

  • 22-03-2019 2:15pm
    #1
    Da11
    Registered Users, Registered Users 2 Posts: 61 ✭✭


    I wonder if anyone could shed some light about the goodwill... A sole trader builds up the business in the course of couple years time and now considering to incorporate it. So he will transfers the business to his new company.
    Is there such a thing as transferring the goodwill to his new company? Are there any tax advantages for him / company?

    Thank You


Comments

  • #2
    fankity flank
    Registered Users, Registered Users 2 Posts: 62 ✭✭fankity flank


    Da11 wrote: »
    I wonder if anyone could shed some light about the goodwill... A sole trader builds up the business in the course of couple years time and now considering to incorporate it. So he will transfers the business to his new company.
    Is there such a thing as transferring the goodwill to his new company? Are there any tax advantages for him / company?

    Thank You

    Unless you're able to structure this as part of an intricate (and costly) tax scheme, I don't think there is much in the way of tax advantage.

    When transferring the goodwill into the company it's considered a disposal for capital gains tax purposes. Any gain can be effectively deferred if consideration is in the form of shares in the company.

    But if money is exchanged in return or the goodwill, or even creation of a director loan account, this would give rise to a capital gains tax liability.

    There are some ways around this I'm sure, but I'd imagine you'd have to pay for the pleasure ;)


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