Many company sales entail part of the consideration being satisfied in the form of loan notes issued by the purchaser. Peter Rayney provides practical guidance on the tax issues.
Many company sales entail part of the consideration being satisfied in the form of loan notes issued by the purchaser. In effect the owner manager is agreeing to finance the deferral of part of their sale proceeds. Many sellers could be forgiven for thinking that they would automatically be entitled to entrepreneurs’ relief (ER) on their ‘loan note’ consideration in the same way as the immediate cash proceeds. However as tax advisers know this is not a straightforward matter.
On 23 June 2010 the ER regime underwent a rather important structural change – ER eligible gains ceased to be subject to a four-ninths gains reduction and instead ER simply became a 10% CGT rate.
This revamping...
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Many company sales entail part of the consideration being satisfied in the form of loan notes issued by the purchaser. Peter Rayney provides practical guidance on the tax issues.
Many company sales entail part of the consideration being satisfied in the form of loan notes issued by the purchaser. In effect the owner manager is agreeing to finance the deferral of part of their sale proceeds. Many sellers could be forgiven for thinking that they would automatically be entitled to entrepreneurs’ relief (ER) on their ‘loan note’ consideration in the same way as the immediate cash proceeds. However as tax advisers know this is not a straightforward matter.
On 23 June 2010 the ER regime underwent a rather important structural change – ER eligible gains ceased to be subject to a four-ninths gains reduction and instead ER simply became a 10% CGT rate.
This revamping...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
