Dinesh Yogendra and Sam Boundy (EY) set out how tax advisers should approach tax due diligence where tax insurance is used on a transaction.
Tax insurance has become increasingly popular in recent years leading to changes in how tax risks are addressed in M&A transactions. Rather than a seller bearing risk through the tax warranties and tax covenant in a share purchase agreement (SPA) the economic burden shifts under an insurance policy to the underwriter who would be liable in the event of a successful claim. Tax due diligence can play a key role in distinguishing tax risks that may not be insurable and so should be factored into the purchase price versus those risks which may be possible to insure facilitating a smoother transaction process.
What is tax insurance?
The two most common forms of tax insurance currently in the M&A...
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Dinesh Yogendra and Sam Boundy (EY) set out how tax advisers should approach tax due diligence where tax insurance is used on a transaction.
Tax insurance has become increasingly popular in recent years leading to changes in how tax risks are addressed in M&A transactions. Rather than a seller bearing risk through the tax warranties and tax covenant in a share purchase agreement (SPA) the economic burden shifts under an insurance policy to the underwriter who would be liable in the event of a successful claim. Tax due diligence can play a key role in distinguishing tax risks that may not be insurable and so should be factored into the purchase price versus those risks which may be possible to insure facilitating a smoother transaction process.
What is tax insurance?
The two most common forms of tax insurance currently in the M&A...
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:
