In Mertrux Ltd v HMRC (TC01253 – 13 July) a company (M) had carried on a business of selling Mercedes cars.
In 2003 it sold this business in return for consideration of £1 705 502.
M claimed rollover relief on the basis that the gain arose from the disposal of its goodwill.
HMRC disallowed 50% of the claim on the basis that only 50% of the consideration should be treated as attributable to goodwill and that 50% was compensation for the loss of M’s agreement with the car manufacturer which did not qualify for relief under TCGA 1992 s 155. M appealed.
The First-tier Tribunal allowed the appeal. Judge Radford held that the purchaser ‘had no reason to pay compensation for the loss of the dealership’.
The whole of the consideration was in respect of goodwill...
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