The taxation of goodwill under the intangible fixed assets regime for corporates gives rise to a number of subtle – and increasingly financially meaningful – questions of law and accounting practice. These arise from the confluence of a number of factors: the sui generis nature of goodwill in accountancy; the draftsman’s decision to shoehorn it into the regime for the taxation of intangibles; its propensity to be acquired as part only of a bundle of assets; a growing tendency towards the disaggregation of baskets of intangibles; and the growing weighting of intangibles in an entity’s balance sheet. Upon the answers to these questions can depend very substantial amounts of tax.
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