Amortisation meaning

Muller UK and Ireland Group LLP and others v HMRC [2026] EWCA Civ 248 The second, third and fourth appellants (the Corporate Members) were part of the Muller multinational corporate group trading in dairy products. In 2013, those appellants moved their respective trades and assets, including intellectual property and goodwill, to the fourth appellant, Muller UK and Ireland Group LLP (LLP), receiving membership units in the LLP in exchange. The LLP recorded amortisation of the assets and goodwill (the Material Assets) in its accounts on a straight-line basis over five years. When calculating their taxable profits from the LLP for the 2013–18 accounting periods, the Corporate Members claimed deductions for that amortisation under Part 8 of the Corporation Tax Act 2009 (CTA 2009). HMRC rejected the claims on the footing that the Material Assets did not satisfy the Part 8 ‘gateway’ in CTA 2009, s 882(1)(b) (as then in force). That provision removed from Part 8’s scope assets obtained from a related party. While Part 8 does not expressly...

In this issue: Budgets and Finance Bills R&D taxation Companies and corporation tax International Finance Employment taxes Taxes management and litigation Remedies and tax Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills Progress of Finance Bill 2025 On 19 December 2024, the government published amendments to the Finance Bill for consideration by the Public Bill Committee. The key revisions affect Schedule 4, which concerns the UK’s multinational top-up tax and the domestic top-up tax rules set out in Parts 3 and 4 of the Finance (No 2) Act 2023. A ‘call for evidence’ dated 20 December 2024 indicates the Committee plans to open its examination of the Bill on 28 January 2025 and aims to finish by Tuesday 4 February 2025. The amendment document includes short explanatory notes outlining the purpose of the revisions. In an unusual step, HMRC...

In this issue: Companies and corporation tax Individuals and income tax Stamp and transfer taxes Taxes management and litigation International Employment taxes LexTalk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Companies and corporation tax UT upholds FTT decision on valuation and allocation of consideration in acquisition of care homes (Nellsar v HMRC) In Nellsar Ltd [2025] UKUT 164 (TCC), the Upper Tribunal rejected both appeals, affirming the FTT’s finding that Nellsar’s accounts did not comply with GAAP for corporation tax relief on goodwill amortisation. Nellsar purchased five care homes as going concerns and assigned substantial elements of the price to goodwill, valuing the properties using depreciated replacement cost (DRC). The FTT decided that, under UK GAAP, the correct basis was market value, adjusted for special assumptions, because operating care homes were sufficiently ‘similar in type and condition’ to the...

This Practice Note looks at Term Loan B (TLB) facilities, which often feature as a senior tranche within syndicated loans in leveraged financings. TLBs are long-established in the US market and are increasingly seen in the European lending market for institutional investors. It examines the structure of a typical TLB and how it diverges from traditional European leveraged loans, before setting out the key features. This Practice Note assumes some understanding of leveraged finance. For introductory information, see: Introductory guide to acquisition finance. For explanations of common terms, see Practice Note: Glossary of acquisition finance terms and jargon. What is a Term Loan B? In lending markets, ‘Term Loan B’ or ‘TLB’ (short for Term Loan Bullet) describes a tranche of senior secured credit facilities made available to a borrower and intended to be syndicated in the institutional loan market. They are usually floating-rate term facilities with an actual or implied non-investment grade rating, a five to seven year maturity and either nominal amortisation of 1% per annum...

What is prepayment finance? Prepayment finance, a form of commodities finance, describes arrangements where buyers fund commodity producers by paying ahead of delivery. This well-established model channels funding directly to buyers or traders of goods and commodities, and indirectly to producers and exporters. Under this structure, a buyer—often called the offtaker—makes an advance to the producer or exporter, with that prepayment backed by a separate loan provided to the offtaker by a lender, typically a bank or a syndicate of banks. Such structures are advantageous to: producers, as they can obtain credit that would otherwise be unavailable through the conventional banking system; and buyers, as the financing enables them to secure long-term supply agreements with producers in return for providing funds. They are especially valuable where the producer operates in jurisdictions with exchange control regulations or tax regimes that prohibit or penalise direct lending to producers by overseas financial institutions. Such regimes often permit advance payments to producers for the purchase...

Overview This Practice Note outlines key characteristics of covenant loose and covenant lite financings and considers certain risks that investors in these facilities may encounter. It assumes a degree of familiarity with leveraged finance terminology and documentation. For introductory material on leveraged finance financial covenants, see Practice Note: Leveraged finance—financial covenants. For an introductory guide to acquisition finance, see Practice Note: Introductory guide to acquisition finance. The Glossary of acquisition finance terms and jargon may also be helpful... Terminology Traditional ‘covenanted’ facility European leveraged facility agreements have traditionally included a package of financial covenants designed to monitor the borrower‑group’s financial performance against a base case financial model. The full suite typically comprises the following covenants: Leverage — this is the ratio of the group’s total [net] indebtedness to its earnings before interest, tax, depreciation and amortisation ( EBITDA ). The leverage ratio gauges the group’s indebtedness against its ordinary operating profit; the higher the ratio, the more indebted the group and the greater...

This Precedent This Precedent is an illustrative bonus schedule for insertion as a schedule into an employment contract or a director’s service agreement. It grants entitlement to an annual bonus determined by reference to a company’s earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA is a benchmark used to assess a company’s overall performance...

Add the following new definitions in Article 2.1: Accounts • means, for each financial year of the Company, the audited [ consolidated ] balance sheet together with the profit and loss accounts of the Company and its subsidiary undertakings, prepared on the historical cost basis and in line with generally accepted accounting principles and all applicable accounting standards, Statements of Standard Accounting Practice, Financial Reporting Standards and Statements of Recommended Practice; After Tax Profit • means the amount of the profit [ (including any unrealised profits) ] of the Group for the relevant financial year (as shown by the Accounts): (a) before any provision or reserve has been made for or in respect of: i the payment of any dividend or other distribution on or in respect of any Shares or the transfer of any sum to reserves; ii the redemption of the [ Preferred Shares OR Loan Notes ]; and iii the amortisation or write-off of goodwill arising on consolidation; and (b) after provision has...