Introduction to buying a company
There are many tax related matters to consider when one company purchases the shares of another. Whilst tax is a major factor in this type of transaction, the impact of any potential tax consequences must be balanced with other wider commercial factors. This guidance note is written from the perspective of the acquiring company (or group of companies). Some of the relevant considerations are set out below, split between pre- and post-completion matters for ease of reference. More detailed commentary can be found in Tolley’s Tax Planning 2022–23, Chapter 3, ‘Buying a company’.
It should be noted that distressed company purchases give rise to a range of additional issues, which are not covered in this note. For an overview of some of the relevant matters to consider in this regard, see ‘Distressed company purchases’, by Eloise Walker in Tax Journal, Issue 1140, 21 (28 September 2012).
Pre-completion matters
The directors of the acquiring company will work with many different advisers throughout the transaction to acquire shares
Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™
Access this article for free with a 7 day trial of Tolley+™ Guidance and benefit from:
- Expert practical tax guidance
- Ready-made templates, step-by-step-guides, interactive flowcharts and checklists
- The latest news updates, insights and analysis
Popular Articles
Reverse charge ― buying in services from outside the UK
Reverse charge ― buying in services from outside the UKThis guidance note covers the reverse charge that applies to services that have been bought in from outside the UK. For an overview of VAT and international services more broadly, see the International services ― overview guidance note. For
Gilts
Gilts‘Gilts’ are securities that are also known by a number of different names (eg gilt-edged securities, Government securities or treasury stock).The Government sells gilts to fund the deficit between public spending and tax receipts. Normally, the Government pays interest to the holder of the gilt
Interest on late paid tax
Interest on late paid taxIntroductionInterest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.Harmonised legislation was introduced in 2009 to:•set statutory
