In his roundup of the latest tax cases, Peter Vaines minds the GAAP, & ponders the difference between a car & a van
- The tax position of goodwill of a professional practice.
- Deciding whether a building is a ‘dwelling’.
- Cars, vans and income tax on a benefit in kind.
- Minding the GAAP.
The recent case of Richard Villar v HMRC [2018] TC 6983 considered the tax implications of a sale of goodwill by a professional person, and is very helpful in clarifying the law in this area.
Mr Villar had a successful medical practice and he sold the business as a going concern to Spire Healthcare Diagnostics Limited for £1m. Mr Villar said that the consideration should be assessed to capital gains tax. However, HMRC argued that the payment was subject to income tax.
A crucial part of the HMRC argument was that virtually the whole of the payment was attributable to goodwill and they said it could not be transferred to Spire because the goodwill was personal to him.
HMRC also argued that there was no business to dispose of
