How to increase your value and buy or sell your business Mike Cooper Tax Partner

cvdfk.com Overview 2  Share v asset  Structures  ER  Planning points  Types of consideration  Employment taxes  Warranty & indemnities  Post sale planning  Inheritance tax  Tax returns  Tax efficient investments Pre-sale The deal process Post sale

cvdfk.com Share v Asset Sale 3 Single taxation Share sale 10% - 28% Double taxation Asset sale 28% - 47%

cvdfk.com Securing the 10% Tax Rate!  Entrepreneurs’ Relief (ER) reduces the capital gains tax rate down to 10%. The main qualifying conditions are 4 10% TAX RATE All conditions satisfied for > 12 months Employee or officer 5% shares & voting rights Trading Company  Maximum individual lifetime entitlement to ER of £10million!  Share options – A way around the 5% voting rule

cvdfk.com Structuring – Property or Investments 5 Shareholders Holding Company TradeProperty Shareholders PropertyTrade Property AND Trade Cheapest to implement Most tax efficient Can sell property for minimal tax Can sell trade for 10%

cvdfk.com Sellers Planning 6  Extracting surplus funds in advance  Use of pensions  Claiming reliefs  R&D tax relief  Capital allowances  Share options – Tying in key employees for low tax cost  Split of consideration – cash / loan notes / shares  Emigration

cvdfk.com Buyers Planning 7 Financing Structure Warranties IHT Shareholders Reliefs Due Dilligence

cvdfk.com Post sale – compliance and planning 8 Tax protection/ wealth management IHT Planning Tax returns CGT Reliefs

cvdfk.com Key Contact Mike Cooper Head of Tax +44 (0) Your nearest office Chantrey Vellacott DFK LLP Russell Square House Russell Square London WC1B 5LF

© Matthew Arnold & Baldwin LLP, All rights reserved. How to increase your value & buy or sell your business Emma Cameron presenting on 23 September 2014