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.
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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.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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