If you have spent your working life building your business, when you reach the point at which you are considering a sale, planning is critical.
VAT, corporation tax, income tax, stamp duty land tax, and capital gains tax are all standing in the wings waiting for you sign on the dotted line; so they can take a share of your hard-earned, sale proceeds.
Key areas that you will need to seek professional advice are:
• Do you need to strip surplus cash from your business prior to sale? What is the most tax effective way to do this?
• Are you selling all, or only part of your business? Do you need to consider demerging?
• If you are selling shares in your company will the sale benefit from Entrepreneurs’ Relief?
• Do you want to keep property owned by the business?
• If you have a group of companies would the group benefit from a formal reorganisation prior to sale?
• What impact will the sale have on any employee share options?
You may also need to consider that a potential buyer will be taking a close look at due diligence issues, particularly PAYE, VAT and corporation tax contingent risks.
In order to maximise the amount of post-tax sale proceeds you receive planning is absolutely key. We recommend that this be done before you instruct the selling agents and lawyers.