1. Strategic Planning for Company Exit Mike Cooper - Tax Partner - 2012

2. Overview of Pre-Sale Tax Planning Share v Asset sale Property Share options Structuring ER R&D Capital Allowances Emigration Tax Reliefs Freezing pay Pensions/dividends Share Capital Reduction Husband/wife/kids Extracting Funds

3. Asset saleDouble taxation28% - 51% Share saleSingle taxationCGT @10% - 28% Share v Asset sale

4. Structuring – property or investments Property AND Trade Property Trade Holding Company PropertyTrade Shareholders Property ring-fenced against commercial risk Can sell property or trade Most tax efficient Cheapest to implement Shareholders

5. Securing the 10% tax rate!  Entrepreneurs’ Relief (ER) reduces the capital gains tax rate down to 10%. The main qualifying conditions are: Each individual has a maximum lifetime entitlement to ER of £10million! Trading Company 10% TAX RATE All conditions Satisfied for ≥12 months Employee or officer 5% shares & voting rights

6. R&D Tax Relief – ‘Imagination is your only constraint…’  30% to 125% uplift in qualifying costs  If you qualify UK companies can either:  reduce CT liabilities; or  generate a cash refund (for loss making SME’s) R&D Expenditure Externally Provided Workers Subcontractors Independent Research ConsumablesSoftwareStaffing Costs

7. Extracting funds pre-sale Share capital Reduction Share capital Reduction Bonuses/ dividends Bonuses/ dividends Husband/ wife/ adult-children Planning Husband/ wife/ adult-children Planning Pension fund Contributions Pension fund Contributions Excess cash balances? Executive pay/ dividend freezes Executive pay/ dividend freezes

8. Sale process  Heads of Agreement  Split of consideration Cash Shares Loan notes  Due diligence support  Tax clearances  Sale and purchase agreement – Tax warranties etc

9. Post sale – compliance and planning Tax shelters/ wealth management Tax returns and post transaction rulings Inheritance tax 2 year rule for BPR 7 year rule to get assets out of taxable estate Investment planning Pension planning Emigration Capital gains tax EIS investments (IT/ CGT/ IHT benefits) Interaction with Entrepreneur Relief

10. 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.commcooper@cvdfk.com Follow us on Twitter : @CVDFK