Share Acquisitions: Private

This practice note contains a number of frequently asked questions about what constitutes a deferred tax liability for which provision must be made or a deferred tax asset. It also attempts to address the issues that may arise in relation to deferred tax when the shares in a  private company are sold. Its aim is to give tax lawyers a sufficient understanding of deferred tax to be able to judge, in the context of any individual deal, how relevant the issue is likely to be to their client.  

This note considers the commercial and tax issues raised by the use of an earn-out structure on the sale of a company where at least part of the price paid by the buyer is calculated by reference to the performance of the target company over a period of time after the acquisition takes place.

The availability of entrepreneurs' relief has significant implications for individuals and trustees. This practice note explains the key features of entrepreneurs' relief.

HMRC and the British Venture Capital Association have agreed two memoranda of understanding intended to offer certainty about valuation and tax treatment of equity interests awarded to managers of target companies and private equity and venture capital providers if certain requirements are met. These memoranda are summarised in this practice note.

A practice note listing key forthcoming dates in 2012 for corporate tax practitioners.

This practice note deals with aspects of the UK tax treatment of employment-related securities and securities options acquired after 5 April 2008 by employees and directors who are UK resident, but not ordinarily resident (R/NOR). It also deals briefly with those who are UK resident and ordinarily resident (R/OR), but not domiciled in the UK.  

A discussion of the main tax issues to consider where the whole or part of the consideration payable on a share sale is to be deferred. This note assumes that the target company is resident and incorporated in the UK. The tax treatment of non-UK residents depends on the tax laws of their jurisdiction.

This practice note covers the main issues that the seller should consider during a share sale. It assumes that the target company is resident and incorporated in the UK. The tax treatment of non-UK residents depends on the tax laws of their jurisdiction. Note: This resource is being reviewed in the light of the 2013 Budget. For more information, see  Legal update, 2013 Budget: key business tax announcements.

This practice note sets out the tax treatment of disposals of shares by individuals before 6 April 2008 and outlines some of the tax planning which took place before changes to the capital gains tax rules took effect on 6 April 2008. It also covers loan notes and earn-outs issued before 6 April 2008 in consideration for the sale of shares. We have retained this material as it may be useful when completing tax returns for periods to 5 April 2008 and dealing with HMRC enquiries relating to those periods.

Almost all sales of private companies include a tax covenant (also called the tax schedule or tax indemnity), generally given by the seller in favour of the buyer. This practice note explains, in broad terms, the main provisions of the tax covenant.

This practice note is about the way payments made by the seller to the buyer under the tax indemnity and tax warranties contained in a share purchase agreement are taxed.

This note considers the various reliefs and exemptions from stamp duty available in a commercial context. NOTE: This resource is being reviewed in light of the 2013 Budget. For more information, see Legal update, 2013 Budget: key business tax announcements.

A note on the substantial shareholding exemption which exempts companies from corporation tax on a gain made on the disposal of a substantial shareholding in another company.

This negotiating guide explains the purpose and rationale for the provisions that usually appear in the tax covenant on a share sale. It also explains some issues that commonly arise in negotiations and in some cases suggests additional drafting that may be useful. It is designed to accompany the long-form PLC Tax covenant: Standard document, Tax covenant: long form. It can also be used with Standard document, Tax covenant: corporate seller version and Standard document, Tax covenant: individual seller version. The section headings in the negotiating guide do not correspond to the order, or in some cases to the headings, of the equivalent provisions in these two versions. But the negotiating guide may still be helpful because the underlying principles are the same, and because all key provisions, and many other provisions, appear in all three tax covenants, as they do in most tax covenants.

A document tracking the development of certain notable pieces of proposed new legislation relating to corporate taxation.

This note is a general summary of the UK rules applying to the taxation of chargeable gains. It describes what chargeable gains are, what assets are affected, when disposals arise, the way in which gains are calculated and the manner in which they are taxed, exceptions from taxation, anti-avoidance rules and how allowable losses may be used. This note is intended as a general overview, so you should be aware that the tax treatment in a particular case may differ from the general position described in this note.

A practice note listing the recent deals published on What's Market.