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Goodwill amortisation on company’s acquisition of care homes was overstated

By Mark McLaughlin, August 2025

The First-tier Tribunal made no error of law in deciding that a company was required by generally accepted accounting practice to account for the acquisition of care home properties on a market value basis modified by special assumptions, which reduced the company’s claim for goodwill amortisation in relation to the care homes. 

The appellant company bought five care homes as going concerns between April 2004 and May 2007. Following enquiries into the appellant’s corporation tax returns, HM Revenue and Customs issued a discovery assessment, closure notices and a consequential amendment for several accounting periods, imposing additional corporation tax liabilities on the basis that the amount properly attributable to goodwill on the appellant’s acquisition of the care homes was lower than claimed (broadly, the amount that the appellant could amortise for corporation tax purposes depended on the correct accounting treatment of the

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