- Get free trial for practice areas as below
- Business
- Consumer
- Corporations
- Criminal
- Employment
- Family
- General Counsel
- Governance
- Immigration
- Intellectual Property
- Personal Injury NSW
- Personal Injury Qld
- Personal Injury Vic
- Personal Property Security
- Property
- Succession
- Work Health & Safety
- Tax
- Mergers & Acquisitions
- Banking & Finance
- Social Justice
- Cybersecurity, Data Protection & Privacy
- Insolvency
- Competition
- Purchase and sale of business
- Goodwill
Tax considerations
The fact that goodwill is not property as that term is generally used does not cause the taxation legislation any hesitation in taxing it. However, it is excluded from the depreciation provisions, which means that a business owner can claim no deduction in respect of depreciation of goodwill. There can be a difference of treatment of taxation of goodwill compared with tax on consideration for a restraint, especially if goodwill is pre-CGT. The relevant provisions are as follows:
Capital Gains Tax
Goodwill is included as a “CGT asset” under s 108-5 of the Income Tax Assessment Act 1997 (Cth).
GST
Section 9-10 of A New Tax System (Goods and Services Tax) Act 1999 (Cth) defines “supply” so as to include goodwill.
Depreciation
Section 40-30 of the Income Tax Assessment Act 1997 (Cth) defines “depreciable asset” in such a way as to exclude goodwill.
See Tax considerations.
