New UK tax efficient route to buy and sell businesses
There are two ways a business may be sold from one group of companies to another – selling the business itself (an assets deal) or selling shares in a subsidiary company running the business (a share sale).
Changes to the tax law mean that, with suitable structuring, a treading group can package up a business in a newly formed company and sell the shares of that new company free of tax on gains. Previously a group structuring the disposal of a business in this way would have suffered the same capital gains charges as with an assets deal. There was no benefit in the extra step of packaging up the business in a new company.
Using this new route can result in a win/win for seller and purchaser.
If your group is considering buying or selling a business and it is not a straightforward share sale, we may be able to improve the post tax result of the deal using this new opportunity.