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Strategic Planning for Company Exit

Strategic Planning for Company Exit. Mike Cooper - Tax Partner - 2012. Overview of Pre-Sale Tax Planning. Share v Asset sale. Shareholders. Structuring – property or investments. Shareholders. Shareholders. Shareholders. Cheapest to implement. Most tax efficient.

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Strategic Planning for Company Exit

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

  2. Overview of Pre-Sale Tax Planning

  3. Share v Asset sale

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

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

  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)

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

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

  9. Post sale – compliance and planning

  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.com Follow us on Twitter : @CVDFK

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