Owner-Managed Businesses

Selling the family business ― overview

Produced by Tolley
  • 12 Jan 2022 13:41

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Selling the family business ― overview
  • Pre-sale planning
  • Trade and assets sale or share sale
  • Tax treatment of disposal consideration
  • Tax reliefs available on the sale of the family business
  • Articles relating to selling the family business

Selling the family business ― overview

Selling the family business will be a transaction which is commercially driven but can have significant tax implications. The guidance notes in this sub-topic review the tax areas to consider when the business owner is considering selling their business ― these are summarised below with links to more detailed commentary.

Pre-sale planning

The owner of the business may have a clear plan on how they intend to realise value from their business and therefore there can be an opportunity to look ahead to ensure the best business structure to accommodate their plans. This could include bringing a spouse or civil partner into the business, separating different trades into different companies, protecting a property by moving it into a holding company or demerging a company between different shareholders. These areas are covered further in the following guidance notes:

  1. Transfer of a trade

  2. Share for share exchange

  3. Demergers ― overview

  4. Reconstructions involving transfer of business

  5. Planning between spouses and civil partners

Trade and assets sale or share sale

If the business is held within a company, there is an option either for the company to sell the trade and assets, or for the shareholders to sell their shares to the person acquiring the business. The tax implications of these options are discussed further in the following guidance

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