The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
When businesses are looking for advice in relation to selling the family company, there are some common situations which often arise. This guidance note sets out some of these situations together with suggestions of a possible course of tax planning to maximise available reliefs. These situations can provide a starting point for conversations with clients who want to discuss selling their company. Included within each situation summary are links to other guidance notes or resources so that further detailed research can be done.
The list of situations dealt with in this guidance note are as follows:
Sale of company to a third party
Sale of the company but part of the business not to be included
Splitting of a property investment company between shareholders
Sale to third party with consideration in cash and loan notes
Sale of trade and assets and extracting remaining reserves
The company is looking to be acquired by a third party or a third party has made an offer to the owners of the company to acquire all their shares.
It is important to ensure that the share structure of the company maximises any tax reliefs especially business asset disposal relief (previously called entrepreneurs’ relief) and any available planning between spouses and civil partners. In addition, the impact of the sale on any share incentive schemes should be reviewed. When a buyer acquires a company, rather than the assets of a business, all of the historic liabilities of that company are also acquired and the buyer will expect to obtain the protection of tax warranties and a tax covenant from the company owners. As part of the sale process, due diligence will be carried out on the company being sold which would cover corporation tax, PAYE and VAT which may require the completion of a detailed checklist by the tax adviser for the company.
The following guidance notes are relevant to this planning
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