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What is ‘Goodwill Acquisition’? 

What is ‘Goodwill Acquisition’? 

What Is It? 

You can now get relief on acquisitions made on or after 1 April 2019 if the goodwill and relevant assets are purchased when you buy a business with qualifying intellectual property (IP), that is liable to Corporation Tax and where relevant assets (including goodwill) are included in the purchase. 

Who is it for? 

Companies looking to acquire another company and are willing to pay a price significantly higher than the market value of the company’s net assets. 

How does it work? 

Companies that acquire goodwill on or after 1 April 2019 may be able to claim tax relief up to 6.5% each year. 

The goodwill relief is restricted to 6 times the acquisition of intellectual property by the company. So if your company does not purchase intellectual property the goodwill tax relief is removed. 

The restriction on the relief of internally generated goodwill acquired from related parties still also applies. 

What should I do next? 

If your company is looking to acquire goodwill, get in touch with Charlotte Gage our Business Tax specialist to see if we can assist with structuring your acquisition for maximum tax relief. 

First published 25 November 2020
Last Updated 25 November 2020

25 November 2020
First published. 

Find out more about Ian Timms

Ian Timms

Ian Timms

Ian is a Partner and the Head of Business Tax at Critchleys LLP.