Corporation Tax Act 2009 section 849A

Disincorporation relief: transfer values for post-FA 2002 goodwill

Section 849A sets out how goodwill is valued for corporation tax purposes when a company transfers its business to its shareholders and a claim for disincorporation relief has been made under the Finance Act 2013.

• Where goodwill has been written down for tax purposes, the transfer value is the lower of its tax written-down value (immediately before the transfer) or its market value.
• Where goodwill appears on the balance sheet but has not been written down for tax purposes, the transfer value is the lower of its cost (as recognised for tax purposes) or its market value.
• Where goodwill does not appear on the balance sheet at all, the transfer value is treated as nil.
• The relief applies when a company transfers its business to some or all of its shareholders and a valid disincorporation relief claim has been made.