Goodwill & tax relief

[Razor]

I have been paid off by the post office to close my business. The sum was £30,000 tax free plus a years salary of £37,000. I have £55,000 goodwill on my balance sheet from my purchase of the business. Can I set the salary off against goodwill to create a loss?

[Ian McTernan CTA]

No. Goodwill is an asset of the business, salary is income. It may be possible to claim a loss on the goodwill by writing it off completely (as the value now is clearly NIL). The 'salary' may be offsetable against such a loss dependent on whether this is actually a salary or a different type of payment and depends on how this salary was treated in previous years.

I don't deal with any sub-postmasters so can't give any further guidance here.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com