Sign-in Help
Commentary

53.1 General

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

53.1 General

| Commentary

53 Earn-outs

53.1 General

Earn-outs—where some of the consideration for the purchase of shares in a takeover is deferred and will be linked to the company meeting various performance targets—fall within the employment-related securities regime. Prior to the coming into force of the Taxation of Chargeable Gains Act 1992 Section 138A, the sale proceeds for capital gains tax purposes would include both the ‘up-front’ payment of cash and the value of the earn-out right1. There would be further capital gains arising on the sums received when the earn-out vested.

Under Section 138A, if an earn-out satisfies the strict conditions in the provisions,

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to LexisLibrary or register for a free trial
EXISTING USER? SIGN IN TAKE A FREE TRIAL TAKE A FREE TRIAL
Stop drafting from scratch and work more productively.
Offering an unrivalled collection of non-litigation precedents for everything specialist and generalist practitioners are likely to encounter.
TAKE A FREE TRIAL Take a free trial Take a free trial