Case Study 5: Our advice provides a multi-million pound tax saving

The shareholders of our client company were delighted to receive a significant offer for part of their business. But the initial excitement was somewhat dimmed by the prospect of corporation tax at 25%, and personal income tax at around 50%.  Since the acquiring company only wished to purchase part of the operation, and not the whole, it appeared impossible to sell the company’s shares in a tax efficient manner.

The shareholders were in danger of missing out on entrepreneurial relief. With that in mind, we designed a restructure of the company, allowing the purchaser to acquire the shares of a new trading company and its assets. As a consequence, all of the shareholders received the benefit of entrepreneurial relief, paying tax at the rate of 10%, on what was a very significant capital gain. The overall tax saving amounted to several million pounds.