Key tax considerations in an asset sale

Copyright © 2025 LexisNexis
Produced in partnership with Emma Perez of Squire Patton Boggs
Practice notes

Key tax considerations in an asset sale

Copyright © 2025 LexisNexis

Produced in partnership with Emma Perez of Squire Patton Boggs

Practice notes
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The sale of a company's business can be structured as either:

  1. •

    a sale of the business assets owned by the current owner, including goodwill (an asset sale), or

  2. •

    a sale of shares if the business is being carried on by a company (a share sale)

The choice between an asset sale or a share sale is determined by tax and non-tax considerations. See Practice Note: Share sale or asset sale—tax considerations for an outline of the differing tax advantages and disadvantages applicable to each option.

This Practice Note summarises the key tax considerations relevant to the sale of assets by a corporate seller to a corporate buyer, both of which are chargeable to UK corporation tax.

In the case of a transfer of a business, special contractual provisions are included in the asset purchase agreement to ensure, so far as possible, that it is a transfer of a business rather than just a transfer of assets, for which see Precedent: Asset purchase agreement—pro-buyer—corporate seller—conditional—long form and the related

Emma Perez
Emma Perez

Director, Squire Patton Boggs

Emma Perez's practice includes advising on a wide range of taxation issues relating to private mergers and acquisitions, company reorganisations and private equity transactions. In addition, Emma regularly advises on employment tax and employee benefits, and the drafting and implementation of a variety of equity-based employee incentive arrangements.
 
Representative experience:
 
  • Acting for UK companies and private equity funds on the tax aspects of corporate acquisitions and disposals, as well as the tax efficient structuring of such transactions.
  • Providing pre-sale tax planning for vendors of private companies.
  • Acting for companies on the implementation and operation of employee share incentive schemes.
  • Advising on the tax-efficient restructuring of corporate groups.

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Goodwill definition
What does Goodwill mean?

The value attributed to the fact that the company is continuing to write profitable new business. It is often calculated as a multiple of the value of new business written in the most recent financial year.

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