Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Buyout definition

What does Buyout mean? In corporate practice, a buyout is the acquisition of a company or of a controlling interest in its shares, giving the buyer effective control of the target. It is a market term used in M&A and private equity rather than one defined by statute or case law. Common forms are the management buyout (MBO), where existing managers take control (often with private equity funding), and the leveraged buyout (LBO), where a sponsor acquires control using significant third‑party acquisition debt, typically secured on the target group. Other variants include management buy‑in (MBI), secondary buyouts between sponsors, carve‑outs...

UK tax treatment of management equity in MBOs: restricted securities, Weight v Salmon, BVCA–HMRC MoU and section 431 elections

Published by a LexisNexis Tax expert

Practice notes

FORTHCOMING CHANGE relating to the rates of business asset disposal relief (BADR):

Following announcements at the Autumn Budget 2024, the capital gains tax rate applying to disposals qualifying for business asset disposal relief (BADR) is set to rise to 18% for disposals completed on or after 6 April 2026, aligning with the lower main capital gains tax rate. This comes after an interim increase to 14% (up from 10%) for disposals occurring on or after 6 April 2025. Legislation implementing these changes has been included in the Finance Act 2025. A management buyout (often termed an ‘MBO’) is the purchase of a business by its existing management team (or selected members of that team), usually with private equity-backed finance. Under such arrangements, the private equity investor acquires a stake in the business (typically a majority interest), and the incumbent management remains in post once the deal completes. MBOs are among the most commonly encountered private equity-backed transactions, as they are regarded as a relatively low-risk route for investors. The success of an MBO will generally depend to a significant extent on the performance and delivery of the management team...

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Web page updated on 22/05/2026

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