What are the UK tax considerations for an overseas purchaser acquiring a UK business?
Produced in partnership with Ben Jones of Eversheds Sutherland and Tim Shaw of Blick Rothenberg

The following Tax practice note produced in partnership with Ben Jones of Eversheds Sutherland and Tim Shaw of Blick Rothenberg provides comprehensive and up to date legal information covering:

  • What are the UK tax considerations for an overseas purchaser acquiring a UK business?
  • UK costs associated with the acquisition of a UK business
  • Stamp duty and stamp duty reserve tax
  • Stamp duty land tax, land and buildings transaction tax or land transaction tax
  • ATED
  • Loss of tax assets
  • VAT
  • Tax-efficient return of profits to the non-UK purchaser
  • Maximising the UK tax-efficiency of the target business
  • Tax-efficient exit
  • More...

What are the UK tax considerations for an overseas purchaser acquiring a UK business?

A non-UK based purchaser of a UK business (or UK-headquartered business) will need to consider the following tax issues:

  1. the UK costs associated with the acquisition

  2. the tax-efficient return of profits to the non-UK purchaser

  3. maximising the UK tax-efficiency of the target business

  4. a tax-efficient exit, and

  5. common transaction structuring options to consider to mitigate acquisition tax costs and maximise tax efficiency

These issues are explored, in turn, in this Practice Note. This Practice Note focuses on UK tax issues. For a summary of some non-UK tax issues in this context, see question 18 in the jurisdictional guide: Mergers and acquisitions in 58 jurisdictions worldwide. Local tax advice will be required to consider those issues.

UK costs associated with the acquisition of a UK business

There are several potential UK tax costs that need to be considered in connection with the acquisition of a UK business by a non-UK corporate purchaser.

Stamp duty and stamp duty reserve tax

On a transfer of shares in a UK company, stamp duty is usually payable by the purchaser at a rate of 0.5% of the consideration given. For more details, see Practice Note: What does stamp duty apply to?

Stamp duty reserve tax (SDRT) also arises on a transfer of shares in a UK company (and at the same

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