Strategic Planning for Company Exit
Mike Cooper - Tax Partner - 2012
Overview of Pre-Sale Tax Planning
Tax
Reliefs
• Share v Asset sale
• Property
• Share options
Structuring
•
•
•
•
ER
R&D
Capital Allowances
Emigration
• Freezing pay
• Pensions/dividends
• Share Capital
Reduction
• Husband/wife/kids
Extracting
Funds
Share v Asset sale
Share sale
Asset sale
Single taxation
Double taxation
CGT @10% - 28%
28% - 51%
Structuring – property or investments
Shareholders
Shareholders
Property
AND
Trade
Holding
Company
Property
Shareholders Shareholders
Trade
Property
Cheapest
to
implement
Trade
Most tax
efficient
Property ring-fenced against commercial risk
Can sell property or trade
Securing the 10% tax rate!

Entrepreneurs’ Relief (ER) reduces the capital gains tax rate down
to 10%. The main qualifying conditions are:
Trading
Company
5% shares
& voting
rights
Employee
or officer
All
conditions
Satisfied for
≥12 months
10% TAX
RATE
Each individual has a maximum lifetime entitlement to ER of
£10million!
R&D Tax Relief – ‘Imagination is your only constraint…’
Externally
Provided
Workers
Staffing Costs
 30% to 125% uplift in
qualifying costs
Subcontractors
 reduce CT liabilities; or
R&D
Expenditure
Independent
Research
Software
Consumables
 If you qualify UK companies
can either:
 generate a cash refund
(for loss making SME’s)
Extracting funds pre-sale
Excess cash
balances?
Pension fund
Contributions
Executive
pay/ dividend
freezes
Husband/ wife/
adult-children
Planning
Bonuses/
dividends
Share capital
Reduction
Sale process
 Heads of Agreement
 Split of consideration
• Cash
• Shares
• Loan notes
 Tax clearances
 Sale and purchase agreement – Tax warranties etc
 Due diligence support
Post sale – compliance and planning
Inheritance tax
2 year rule for BPR
7 year rule to get assets
out of taxable estate
Investment planning
Tax returns
and post
transaction
rulings
Pension
planning
Emigration
Tax shelters/
wealth
management
Capital gains tax
EIS investments (IT/
CGT/ IHT benefits)
Interaction with
Entrepreneur Relief
Contact
Chantrey Vellacott DFK LLP
Russell Square House
10-12 Russell Square
London
WC1B 5LF
Mike Cooper
Tax Partner
T: 0207 509 9201
M: 07976 709910
E: mcooper@cvdfk.com
Follow us on Twitter : @CVDFK