Selling, buying or restructuring a business? We advise on the deal - not just the tax.
Tax is not only a cost, it's a barrier. Without proper tax planning your deal may fail. We work with you, your accountant or lawyer and corpoate finance advisor to ensure that your deal get's over the line without any tax issues.
Talk to us before you signA business transaction starts with the commercial outcome you want - but tax law can materially change the result.
The headline price is only one part of the deal. What is actually being sold? What happens to cash, debt, working capital or property? How is the price calculated and when is it paid? What happens if part of the consideration is deferred or dependent on future performance?
The tax treatment does not always follow the commercial label attached to a payment or arrangement. Revenue may look at how the transaction is actually structured and funded, while valuable reliefs can depend on detailed conditions being satisfied before the deal is completed.
“We know what we want to do. What happens next?”
We help clients understand how the transaction process normally works, what should be agreed at an early stage and where important commercial protections may be needed.
That can include heads of terms, exclusivity, initial payments, deal timetable and identifying the issues that should be resolved before significant time and cost are committed.
Get the process right from the beginning.
“What are we actually agreeing?”
We look beyond headline price to how the deal really works — what is being acquired or sold, what is included, what remains behind, how and when consideration is paid and what assumptions underpin the price.
Working capital, retained cash, debt, deferred consideration and earn-outs can all materially change the economics.
Understand the deal, not just the headline number.
“What is the best way to achieve the commercial objective?”
A share acquisition, asset purchase or transaction involving an existing group structure can produce very different commercial and tax outcomes.
We consider whether the existing structure works, whether assets or businesses need to be separated and whether restructuring should take place before the transaction progresses.
Design the structure before the structure limits the deal.
“What are we taking on — or being asked to stand behind?”
For purchasers, that means understanding the historic tax and commercial exposures being acquired.
For sellers, it means understanding warranties, indemnities, tax covenants, disclosure requirements and other obligations that may continue long after completion.
Identify and allocate risk before signing.
“What still needs to happen?”
Transactions can require due diligence, valuations, tax clearances, restructuring steps, shareholder arrangements, pension funding and other transaction-specific work before completion.
We identify those issues early enough that they do not become obstacles when the parties are ready to sign.
Keep the transaction moving towards completion.
The contracts, funding, consideration and corporate steps that make a transaction work are also what determine its tax treatment. They are inseperable.
Bring tax in too late and months of work can be put at risk. Documents may need to be redrafted, commercial terms reopened and issues renegotiated — creating delay, uncertainty and pressure on relationships at exactly the point when the parties are trying to complete the deal.
Some of the questions that commonly arise when buying, selling or restructuring a business.
Ideally, before heads of terms or other significant commercial terms are agreed. The structure, funding, consideration and timing of a transaction can all affect the tax outcome. Bringing tax advice in late can mean revisiting contracts, renegotiating terms or restructuring a deal that is already well advanced.
These are fundamentally different transactions. A share sale transfers ownership of the company itself, while an asset sale involves the company selling some or all of its underlying business and assets. The tax, legal and commercial consequences can be very different for both buyer and seller.
The headline valuation is often only the starting point. The amount ultimately payable can depend on enterprise value, debt, cash, working capital, completion adjustments and the form of consideration. Understanding those mechanics is essential before assuming that the headline figure is the amount that will actually be paid or received.
The treatment depends on how the additional consideration is structured and the conditions attached to it. Payments linked to future performance, continued employment or other conditions can produce different tax outcomes. The commercial mechanics and tax treatment should therefore be considered before the earn-out or deferred payment terms are agreed.
Potentially. A transaction may require a holding company insertion, separation of assets or businesses, a hive-up, hive-down or another restructuring before the intended deal can be completed efficiently. Restructuring reliefs can depend on detailed conditions, so these steps should be considered before the sale arrangements become fixed.
Depending on the shareholder, the company and the transaction, reliefs may significantly reduce the tax arising on a sale. However, reliefs generally depend on detailed ownership, employment, trading and timing conditions. Eligibility should be established before the transaction is structured rather than assumed at completion.
A tax covenant is commonly used in a share sale to allocate responsibility for certain historic tax liabilities between buyer and seller. Its wording can determine who ultimately bears the cost if a tax issue relating to a period before completion emerges after the transaction has closed.
Yes. Tax consequences can arise from the way a transaction is funded, structured and documented. If those issues are identified late, commercial terms may need to be reopened and contracts may need to be redrafted. In some cases, weeks or months of work can be affected, creating delay, uncertainty and pressure on the transaction.
We don’t arrive after the deal has been negotiated simply to calculate the tax.
We become involved while the transaction can still be shaped — helping clients understand the economics, structure the deal, negotiate risk and get the transaction completed.