Many companies, particularly the traditional family business, will have diversified over the years into a
range of business operations. Often it is the case that prospective purchasers will be interested in
acquiring specific lines of the business rather than an amalgamation of businesses with no natural linkage. In these circumstances, the value of the enterprise will be enhanced by splitting the business into distinct units so that the founder or owner-manager, perhaps through an overall holding company structure, holds each separately.
Moving to a structure such as this can have significant tax implication, particularly through capital gains tax and stamp duties, unless the structures are planned and executed carefully. A tax efficient splitting of the component elements also presents the owner with an opportunity to retain an interest in some parts of the enterprise, for example, property assets, or to facilitate succession of part of the business by the next generation of the family.
In some scenarios, the best commercial result are achieved by consolidating different businesses that
are currently held separately, and again, pre-sale re-structuring can be accommodated on an effective
tax-free basis with appropriate advance planning. A prospective purchaser will generally require undertakings in the form of tax warranties and indemnities. Any issues that might emerge here need identification as early as possible in the planning stage of preparing your business for sale. These issues need be resolved in the most part before ‘going to market’ to avoid both the delays and costs that might otherwise occur later in the process.
range of business operations. Often it is the case that prospective purchasers will be interested in
acquiring specific lines of the business rather than an amalgamation of businesses with no natural linkage. In these circumstances, the value of the enterprise will be enhanced by splitting the business into distinct units so that the founder or owner-manager, perhaps through an overall holding company structure, holds each separately.
Moving to a structure such as this can have significant tax implication, particularly through capital gains tax and stamp duties, unless the structures are planned and executed carefully. A tax efficient splitting of the component elements also presents the owner with an opportunity to retain an interest in some parts of the enterprise, for example, property assets, or to facilitate succession of part of the business by the next generation of the family.
In some scenarios, the best commercial result are achieved by consolidating different businesses that
are currently held separately, and again, pre-sale re-structuring can be accommodated on an effective
tax-free basis with appropriate advance planning. A prospective purchaser will generally require undertakings in the form of tax warranties and indemnities. Any issues that might emerge here need identification as early as possible in the planning stage of preparing your business for sale. These issues need be resolved in the most part before ‘going to market’ to avoid both the delays and costs that might otherwise occur later in the process.
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