WHEN ONE COMPANY is seeking to take over another the bids and counter bids that take place can make a commercial transaction appear more in the nature of a poker game with the 'players' seeking to bluff themselves into a winning position. Once a price has been agreed getting the tax structure of a company takeover right then becomes equally important if one is not to negate the financial advantages that each side thinks it has gained over the other. This is therefore the first of two articles looking at some of the tax pitfalls with private company acquisitions; this article considers the personal tax position of owner-managers and the second will consider issues relating to enterprise management incentive (EMI) options. References in this article are to paragraphs of TCGA 1992 Sch A1 unless otherwise stated.
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