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Valuation of and recognition of goodwill

It is essential that a careful approach is taken to the valuation and recognition of goodwill, as this is liable to be challenged by HMRC. In order to be transferred to the company, the goodwill must, in HMRC’s view, be free, ie not personal goodwill which remains with the individual running the business, and not attaching in some way to the property. If it does attach to the property, a higher property valuation should apply for which there is no corporation tax relief, though business asset disposal relief (previously known as entrepreneurs’ relief) will be available on the higher