The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
There are many tax related matters to consider when one company purchases the shares of another. This guidance note is written from the perspective of the acquiring company (or group of companies). Some of the relevant considerations are set out below, split between pre- and post-completion matters for ease of reference.
It should be noted that distressed company purchases give rise to a range of additional issues, which are not covered in this note.
The directors of the acquiring company will work with many different advisers throughout the transaction to acquire a company. Depending upon the nature of the transaction this is likely to include a team of lawyers, corporate financiers, tax advisers, valuations specialists, etc. The key driver for each of these parties at this stage of the transaction is to agree the detailed terms of the share purchase agreement (SPA) to the satisfaction of their respective clients, including the price payable for the shares and / or assets being acquired.
A due diligence exercise is usually carried out prior to the acquisition of the relevant shares. As part of this process detailed checks will be made concerning the legal, commercial, financial and tax history of the vendor company (or group). There are many reasons why a due diligence process is carried out, but from a tax perspective the key reasons are to determine:
whether the corporation tax and deferred tax figures in the financial statements of the company being acquired are materially accurate and, if they are not, to estimate the level of any potential discrepancy
whether the correct treatmen
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
‘Hold-over’ relief allows for the deferral of a gain that would otherwise arise in relation to a disposal. No capital gains tax (CGT) is due in respect of the disposal, but the base cost of the asset for the transferee for the purpose of a future disposal is reduced by an amount equal to the gain
The basic rule is that all benefits provided to an employee by reason of their employment are taxable unless there is a specific exemption or other rule that means they are not chargeable to tax.ExemptionsThe main exemptions for employee benefits are in ITEPA 2003, ss 227–326B (Pt 4).Below is an
This guidance note provides details of quarterly instalment payments (QIPs) for corporation tax purposes and which companies need to pay their tax liabilities in this manner.Generally, corporation tax is payable nine months and one day after the end of the relevant accounting period. However, large
What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.