Transfer of a Business
Principal issues include:
Clean break
The purchaser does not acquire the historic tax and trading liabilities of a company.
Cherry picking
With the exception that the purchaser is bound to take the employees of the business, the parties can otherwise decide which assets and liabilities should transfer to the purchaser and which should stay. For example a significant liability could be left behind with the seller.
Tax
A purchaser will not have the benefit of capital allowances on the purchase of shares but for the purchase of certain assets they will be available. A corporate purchaser may be entitled to a tax deduction on the acquisition of goodwill. Stamp duty land tax (at rates of up to 4%) will be payable on the transfer of property assets.
Clean break
The purchaser does not acquire the historic tax and trading liabilities of a company.
Cherry picking
With the exception that the purchaser is bound to take the employees of the business, the parties can otherwise decide which assets and liabilities should transfer to the purchaser and which should stay. For example a significant liability could be left behind with the seller.
Tax
A purchaser will not have the benefit of capital allowances on the purchase of shares but for the purchase of certain assets they will be available. A corporate purchaser may be entitled to a tax deduction on the acquisition of goodwill. Stamp duty land tax (at rates of up to 4%) will be payable on the transfer of property assets.