The important role of advisors when selling your business – Part 3: TAX SUPPORT

One of the most important aspects of any business transaction is the tax implications involved. Failing to consider these implications properly can lead to significant financial losses in the long run. So what is the importance of having a specialist tax advisor when selling your business?

Understanding the Tax Implications

One of the primary reasons to engage a specialist tax advisor when selling a business is to ensure that you fully understand the tax implications of the transaction. A specialist tax advisor can help you identify any potential tax risks or opportunities and develop strategies to mitigate those risks and take advantage of any opportunities. They can also help you understand the tax implications of different deal structures, such as asset sales versus share sales, and help you choose the best structure for your situation.

Negotiating the Deal

A specialist tax advisor can also play a critical role in negotiating the deal itself. They can help you structure the deal to minimise the tax impact on both parties, and help you negotiate favourable terms that consider any tax implications. For example, if you are selling your business, a specialist tax advisor can help you negotiate a higher sale price by identifying potential tax savings for the buyer, such as capital allowances or tax credits.

Due Diligence

Another important role that a specialist tax advisor can play when selling a business is in conducting due diligence. Due diligence is a process by which the buyer investigates the business to ensure that there are no hidden liabilities or other issues that could affect the value of the business. A specialist tax advisor can help you identify and assess any tax liabilities that may be associated with the business, such as unrecorded tax liabilities or outstanding tax disputes. They can also help you assess the tax compliance history of the business and identify any potential exposure to penalties or other sanctions.

Post-Transaction Planning

Finally, a specialist tax advisor can help you plan for the tax implications of the transaction after it has been completed. They can help you optimise your tax position going forward and ensure that you remain in compliance with all applicable tax laws and regulations. For example, they can help you structure the new business in a tax-efficient manner, and help you identify any tax credits or other incentives that may be available to you.

Selling a business is a significant undertaking that requires careful consideration of many different factors, including tax implications. Engaging a specialist tax advisor can be one of the most important decisions you make during this process.