Tax clauses

Tax clauses

This subtopic brings together a bank of precedent clauses that a tax lawyer may be asked to review or draft within a wider document or agreement that is usually prepared by corporate or banking colleagues. Each of the clauses includes drafting notes that explain what the clauses are designed to achieve and when they should be used.

Corporate transactions

Share sales

When a person is acquiring a company, the main document setting out the agreement between the parties is a share purchase agreement (SPA), which usually includes several tax-related clauses or parts:

•
a tax covenant, which is a contractual promise by the seller to pay to the buyer an amount equal to any tax liability of the target company or group covered by the tax covenant, see Precedents:
1. ◦
  Tax covenant—single corporate seller—buyer and seller wording
2. ◦
  Tax covenant—multiple individual sellers—buyer and seller wording
3. ◦
  Tax covenant—short form—buyer and seller wording
•
a set of warranties from the seller to the buyer regarding the tax position of the target company or group, see Precedents:
1. ◦
  Tax warranties—long form
2. ◦
  Tax warranties—short form
•
a

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