Key tax considerations on selling a company

The sale of a company involves much planning by its owners and advisers. The sale of the business or shares can cover a range of subjects including aspects of capital gains tax transactions in securities and deferred consideration as well as work on due diligence warranties and indemnities.

Entrepreneurs’ relief

Since 2008 qualification for capital gains tax entrepreneurs’ relief enables a taxpayer to pay tax at a flat rate of just 10% on qualifying accumulated lifetime gains of up to £10m. Consequently ensuring eligibility for this relief is a key tax planning aim. Otherwise the standard rates of capital gains tax are 10% for gains falling within the basic rate band and 18% on those within the 40% and 45% rate bands – with separate ‘upper rates’ of 18% and 28% respectively applying to particular gains including residential property.

Three...