strategic planning for company exit mike cooper - tax partner - 2012
TRANSCRIPT
Strategic Planning for Company Exit
Mike Cooper - Tax Partner - 2012
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
Asset sale
Double taxation
28% - 51%
Share sale
Single taxation
CGT @10% - 28%
Share v Asset sale
Structuring – property or investments
Property
AND
TradeProperty Trade
Holding Company
Property Trade
Shareholders
Property ring-fenced against commercial risk
Can sell property or trade
Most tax efficient
Cheapest to
implement
ShareholdersShareholders
Shareholders
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!
TradingCompany
10% TAX RATE
Allconditions Satisfied for ≥12 months
Employeeor officer
5% shares& voting
rights
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
Consumables
Software
Staffing Costs
Extracting funds pre-sale
Share capitalReduction
Bonuses/ dividends
Husband/ wife/adult-children
Planning
Pension fundContributions
Excess cash balances?
Executive pay/ dividend
freezes
Sale process
Heads of Agreement
Split of consideration
• Cash• Shares• Loan notes
Due diligence support
Tax clearances
Sale and purchase agreement – Tax warranties etc
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
Contact
Chantrey Vellacott DFK LLPRussell Square House10-12 Russell SquareLondonWC1B 5LF
Mike Cooper Tax PartnerT: 0207 509 9201M: 07976 709910E: [email protected]
Follow us on Twitter : @CVDFK