SDLTM04005 - Scope: How much is chargeable: Goodwill

Stamp Duty Land Tax (SDLT) is a charge on transactions in ‘land’.

Thus the subject-matter of the charge includes anything forming part of the land as a matter of law, such as buildings and structures forming part of the land, and fixtures.

This means that the subject-matter of the charge may or may not include what is described as goodwill.

In some instances what is described as goodwill actually forms part of the land. This has often previously been described as inherent goodwill because it is inherent in the land.

In other cases goodwill, sometimes previously described as called free goodwill, is separate from the land.

There is more guidance on the distinction between the different types of goodwill in the Capital Gains manual https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual (external users can find the guidance at http://www.hmrc.gov.uk/manuals/cgmanual/Index.htm) and in the joint HMRC and Valuation Office Agency practice note on apportioning the price paid for a business transferred as a going concern.

Goodwill not forming part of the value of the land will only be present on the sale of a business or part of a business, but not necessarily even then.

For Capital Gains Tax and SDLT purposes the value of goodwill and any other separately identifiable intangible assets will usually be represented by the difference between the value of the business as a going concern and the value of the tangible assets (the property, fixtures, fittings, chattels etc).

Issues relating to the categorisation of goodwill, or the valuation of free goodwill where an apportionment is required, should be referred to the Valuation Office Agency.

The exclusion of goodwill from the charge to stamp duty by FA02/S116 does not apply to SDLT.