Practice for sale

A husband and wife are preparing to retire and sell their accountancy practice in the middle part of next year and (not surprisingly) would like to keep their tax liabilities down. They have traded as a limited company for the past 14 years. A specialist firm has been asked to handle the sale.

However I expect that the purchaser will only wish to take over the clients and staff and the proceeds will be goodwill for the company. This would produce a high corporation tax liability (the business is a small company by definition) and an additional capital gains tax liability when the money is withdrawn and entrepreneurs’ relief is claimed on the shares.

As a throw-away comment the firm with whom the sale was discussed have asked whether the business might be disincorporated. I am wary about doing this as I presume...