| Commentary

142.2 Repayment methods

| Commentary

142.2 Repayment methods

Both seller and buyer should resist any suggestion that the target company repay its indebtedness by increasing the price of the shares in exchange for a release of its debt. This is because the increased sale proceeds will potentially expose the seller to a higher capital gains tax bill, and the buyer to a greater liability to stamp duty. As part of such an arrangement the target company will presumably be required to undertake an obligation to reimburse the buyer for repaying its indebtedness. This requirement may fall within Section 678(3) of the Companies Act 2006 on

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