How to increase your value and buy or sell your business Mike Cooper Tax Partner

1. How to increase your value and buy or sell your business Mike CooperTax Partner

2. Overview

3. Share v Asset Sale

4. Securing the 10% Tax Rate! • Entrepreneurs’ Relief (ER) reduces the capital gains tax rate down to 10%. The main qualifying conditions are: All conditions satisfied for ≥12 months 5% shares & voting rights Trading Company Employee or officer 10% TAX RATE • Maximum individual lifetime entitlement to ER of £10 million! • Share options – A way around the 5% voting rule

5. Structuring – Property or Investments Shareholders Shareholders Shareholders Shareholders Cheapest to implement Most tax efficient Can sell property for minimal tax Can sell trade for 10%

6. Sellers Planning • Claiming reliefs • R&D tax relief • Capital allowances • Share options – Tying in key employees for low tax cost • Split of consideration – cash / loan notes / shares • Emigration? • Extracting surplus funds in advance (e.g. EFRBS)

7. Employer Financed Retirement Benefit Scheme (EFRBS) • Trust set up by company for the benefit of employees and directors • Cashflow benefits for OMBs – reduce Corporation Tax and allow access to cash when liquidity permits • High rewards but risk of enquiry • Must be a minimum of 3 Directors/employees – 1 of which should be a non-family member • £200k current year trading profits entry level • Suitable for trading and investment companies

8. Buyers Planning What are you buying – shares or assets? Structure on acquisition Intellectual property – where to locate? Employment taxes Under claimed reliefs Warranties and indemnities EIS reliefs Due diligence

9. Post sale – compliance and planning

10. Your nearest office Key Contact ChantreyVellacott DFK LLP Russell Square House 10-12 Russell Square London WC1B 5LF Mike Cooper Head of Taxe: mcooper@cvdfk.comm: 07976 709 910 @CVDFK /ChantreyVellacottDFK /CVDFK