We recently helped a client structure the acquisition of a retail business – and before a single contract was signed, one conversation with us saved them a significant amount in tax.

The deal looked simple on paper. Agreed price, memorandum of sale in place, solicitors instructed. But when we reviewed the paperwork, a critical detail had been left unaddressed – and it is one we see overlooked time and time again.

The purchase price had not been split between goodwill and physical assets

This matters more than most buyers realise.

Here is what to look for when buying any business:

🔹 Physical assets (equipment, fittings, fixtures) can qualify for significant tax relief – in some cases 100% in year one. The higher the value attributed here, the more tax your company saves early on.

🔹 Goodwill does not attract the same relief under current UK tax rules. A higher goodwill figure means less tax efficiency for the buyer – but it often suits the seller. This creates a genuine negotiating dynamic that most buyers are not aware of.

🔹 The split must be agreed before contracts are exchanged – once signed, it is much harder to revisit.

🔹 An independent valuation of the physical assets gives you a defensible position with HMRC and strengthens your negotiating hand.

In short – as a buyer you want:

✅ Higher value on physical assets → more tax relief

✅ Lower goodwill → less non-deductible intangible on your balance sheet

✅ The agreed split written into the contract

✅ Tax advice before you sign – not after

As a seller the position is often reversed – which is exactly why this needs to be negotiated, not assumed.

We helped our client understand the tax implications of each scenario, identify the most efficient structure, and ensured the right advice reached their solicitor before exchange.

If you are looking to buy a business – of any size, in any sector – speak to us early. The right structure from day one can make a material difference to your tax position for years to come.

📧 sales@lmjgroup.co.uk 📞 03303905959