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

2. Overview Share v asset Structures ER Planning points Pre-sale Types of consideration Employment taxes Warranty & indemnities The deal process Post sale planning Inheritance tax Tax returns Tax efficient investments Post sale

3. Asset sale Double taxation 28% - 47% Share saleSingle taxation CGT @10% - 28% 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: Maximum individual lifetime entitlement to ER of £10 million! Share options – A way around the 5% voting rule Trading Company 10% TAX RATE All conditions satisfied for ≥12 months Employee or officer 5% shares & voting rights

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

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 Tax shelters/ wealth management Tax returns and post transaction rulings Inheritance tax 2 year rule for BPR 7 year rule to get assets out of taxable estate Investment planning Capital gains tax EIS investments (IT/ CGT/ IHT benefits) Interaction with Entrepreneur Relief

10. Mike Cooper Head of Tax e: mcooper@cvdfk.com m: 07976 709 910mcooper@cvdfk.com Mike Cooper Head of Tax e: mcooper@cvdfk.com m: 07976 709 910mcooper@cvdfk.com @CVDFK /ChantreyVellacottDFK /CVDFK Key Contact Your nearest office