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Write-off goodwill

Initiate

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Hi, 

 

The company has stopped one of its business line so the goodwill of this business line must be totally written off in the book. I understand that goodwill is not tax deductible in Australia.  How can I report it in the company tax return form?  Please help urgently.

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Community Moderator

Replies 0

Hi @andykfluk 

 

You are correct goodwill is not a depreciable asset, nor can it be written off as a deduction. Generally the sale of business assets (excluding stock) but including goodwill may trigger a capital gains tax event. More information on Goodwill and Capital Gains can be found in TR 1999/16. There are also various Capital Gains Tax (CGT) concessions available to small business owners. Correctly applying these concessions may reduce your CGT liability when selling a business.

 

As we don’t have all of the facts of type of business, why and how it is being closed down etc we recommend you seek advice from a professional advisors who are aware of the specific circumstances or contact our Early Engagement area for tailored advice.

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Community Moderator

Replies 1

Hi @andykfluk 

 

We will look into some information for you and let you know how you should report.

Initiate

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Thanks.  At the moment, I please it as all other expenses first.  After then, I report it as non-deductible expenses "Impariment loss of goodwill".  I am not sure whether it is a correct way,.

Most helpful response

Community Moderator

Replies 0

Hi @andykfluk 

 

You are correct goodwill is not a depreciable asset, nor can it be written off as a deduction. Generally the sale of business assets (excluding stock) but including goodwill may trigger a capital gains tax event. More information on Goodwill and Capital Gains can be found in TR 1999/16. There are also various Capital Gains Tax (CGT) concessions available to small business owners. Correctly applying these concessions may reduce your CGT liability when selling a business.

 

As we don’t have all of the facts of type of business, why and how it is being closed down etc we recommend you seek advice from a professional advisors who are aware of the specific circumstances or contact our Early Engagement area for tailored advice.