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TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My father died last year leaving behind a small accountancy and tax practice with annual i

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My father died last year leaving behind a small accountancy and tax practice with annual income in the region of £20 – 25K that he operated as a sole practitioner.
A local practice took on the clients as part of my fathers contingency plans (just clients, no other assets/business name etc) and have subsequently paid his estate a £1 per £1 of fee income for those clients retained 12 months after my father’s death, this being significantly less than his annual fee income.
Is the base cost for any Estate CGT calculation the annualised fee income at death & therefore there is no capital gain?
Hi. Let me take a look at this and I'll get back to you.
I'm assuming that your father had an agreement with the other practice that payment would be deferred for a year.
Normally, as you will see if you click on some of the links which came up in a Google search below, the goodwill of an accountancy practice (the client value) is usually a multiple of the gross recurring annual fees. That will certainly be more than £1 per client, though the multiple can vary depending on the quality of the client base. The google search is here:
The goodwill of your late father's practice should be valued as at the time of his death and based on what has been paid for the client base, there surely cannot be a capital gain.
I hope this helps but let me know if you have any further questions.
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