Scope: How much is chargeable: Goodwill
Stamp Duty Land Tax (SDLT) is a charge on transactions in ‘land’.
Thus the subject-matter of the charge includes anything forming part of the land as a matter of law, such as buildings and structures forming part of the land, and fixtures.
This means that the subject-matter of the charge may or may not include what is described as goodwill.
In some instances what is described as goodwill actually forms part of the land. This is often described as inherent goodwill because it is inherent in the land.
In other cases goodwill, sometimes called free goodwill, is separate from the land.
There is more guidance on the distinction between inherent goodwill and free goodwill in the Capital Gains Manual (external users can find the guidance at http://www.hmrc.gov.uk/manuals/cgmanual/Index.htm).
Free goodwill will only be present on the sale of a business or part of a business, but not necessarily even then.
Issues relating to the categorisation of goodwill, or the valuation of free goodwill where an apportionment is required, should be referred to the Valuation Office Agency.
The exclusion of goodwill from the charge to stamp duty by FA02/S116 does not apply to SDLT.