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UK tax weekly: Nellsar goodwill/SDLT apportionment; Murphy share loss relief enquiries; SDLT avoidance enquiries valid; MTD FAQs; OECD CRS expansion; pensions; key dates; HMRC Manuals—5 June 2025

Published on: 05 June 2025

Published by a LexisNexis Tax expert
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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 identifiable assets. As a consequence, the goodwill amounts were overstated. The UT concluded the FTT was entitled, on the evidence, to reach that outcome and had not invented a theory at odds with the expert evidence. For SDLT, the UT endorsed the FTT’s adoption of...

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