Birketts LLP
4 Experts
1 Contributions by Birketts LLP Experts
PRACTICE NOTES
Before disposing of a business or trade
When planning a disposal, a corporate seller must choose the most suitable deal structure. Commercial drivers should lead, yet securing a tax-efficient outcome will inevitably be a key concern.
The initial choice is whether to transfer:
the business and its underlying assets (a business sale), or
the shares in a subsidiary that holds the business and assets (a share sale)
Broadly, sellers tend to prefer a share sale: it offers a straightforward exit and, where the substantial shareholdings exemption (SSE) applies, any gain is exempt from tax. An asset deal is more likely to crystallise tax charges and leaves any pre-completion tax liabilities with the seller.
This Practice Note does not address individual sellers or business asset disposal relief (BADR). For more on BADR, see Practice Note: CGT—business asset disposal relief (formerly
Tax
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