[neilwilson]

The bookkeeping entries are a bit esoteric but essentially you value the business at a reasonable amount, let's say £100K based on the cashflow (perhaps 3 or 4 times the turnover). Then you tot up the value of the actual material things in the business, so domains and the like might be worth £200 on the open market.

What that means then is you have £200 of 'intangible assets - domains' and £99,800 of 'intangible assets - goodwill', then on the other side of the balance sheet you have '£100,000 - shares issued'.

The £100K of shares you receive for the business then get 'Incorporation Relief' on them so you don't have to find £20K of hard cash to pay Capital Gains Tax.

It's all done with bookkeeping entries, not actual money.