Commentary

53.2 HM Revenue and Customs guidance on earn-outs

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

53.2 HM Revenue and Customs guidance on earn-outs

| Commentary

53.2 HM Revenue and Customs guidance on earn-outs

HM Revenue and Customs has given guidance to the effect that it will not seek to invoke the employment-related securities regime where an earn-out operates entirely to cover further proceeds of sale with no element of remuneration1. On the other hand, earn-outs including an element passing value to a prospective employee as a reward for services over a performance period, or as an inducement to continue working for the business, fall within the regime and an apportionment of value will have to be made on a just and reasonable basis. In most

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