SCIT CAPITAL GAINS TAX – Roll-relief – Goodwill – Franchisor purchasing Franchisees’ restaurant businesses – part of the consideration allocated to goodwill not inherent in the property of the restaurant business – whether HM Revenue and Customs were bound by the terms of the contract of sale which was honestly reached and at arms length – no – whether as a matter of law ownership of goodwill in the franchisees’ businesses belonged to the franchisor – no – principally a question of fact – was goodwill attached to the franchisees’ restaurant businesses – yes – did the franchisees own the goodwill – yes – did the franchise agreements on termination realise considerable added value for the purchaser – no – the franchisor already had ownership of the brand – did the consideration obtained for goodwill qualify for roll-over relief – yes – should all or part of the consideration allocated to goodwill be apportioned to compensation for early termination of the franchise agreements – no – should the consideration obtained for goodwill be apportioned in accordance with section 52(4) TCGA 1992 – no – Appeal allowed in principle – final determination of the quantum of chargeable gains and costs reserved.
Judges:
Michael Tildesley OBE SC
Citations:
[2006] UKSPC SPC00524
Links:
Capital Gains Tax
Updated: 05 July 2022; Ref: scu.240288