If the goodwill was acquired from an unrelated party on or after 1 April 2002 then relief for the purchased goodwill is available in the company. The amount paid by the company for the goodwill should be amortised over its expected useful life (subject to a maximum of 20 years) and the amortisation will be deductible for corporation tax. So the cost of the goodwill to the company becomes a corporation tax deduction over a period of time, providing tax relief of at least 20% (for FY 2011)

If the goodwill was acquired from a related party and that related party was in existence before 1 April 2002 then no relief is available.

Related: How to value the goodwill – When looking to buy an existing business how do you value the goodwill if the assets are transferred at market value?