Abolishing relief for acquired goodwill

Nobody would have described relief for acquired customer related intangibles as a ‘loophole’, but the Summer Finance Bill 2015 abolishes it with immediate effect as part of the government’s ‘fairness’ agenda. The change will raise revenue; however, it also indicates that the corporate tax outlook is uncertain, which undermines competitiveness. This isn’t the end of asset sales, but it can lead to asymmetrical outcomes. If the substantial shareholding exemption (SSE) is available, sellers will continue to push for a sale of shares rather than assets. In practice, the real difficulties lie in the allocation of consideration and the valuation of intangibles.