Smart Strategies for Exit and Business Sales
When preparing to exit, it’s crucial to understand the selling your business tax implications. Without tailored tax planning, the tax you pay could be much higher than necessary, leaving less of the sale price in your hands.
Our solicitors specialise in advising on the exit tax rules in the UK, helping you prepare for the tax on the sale of a business, whether through a share deal or an asset sale tax arrangement.
Exit Tax and Selling Your Business
The tax bill when selling your business depends on your structure, how the transaction is structured, and your personal tax position. Key considerations include:
- Capital Gains Tax (CGT): Most disposals are subject to CGT. The CGT rate depends on whether you are a basic rate taxpayer or higher rate taxpayer.
- Business Asset Disposal Relief: If you qualify for Business Asset Disposal Relief, you could pay capital gains tax at just 10% instead of the standard capital gains tax rate.
- Corporation Tax: In an asset sale, companies must pay corporation tax on gains before owners can extract funds.
- Inheritance Tax (IHT): With proper structuring, including trusts, future exposure to IHT can be reduced.
Staying up to date with rule changes — including new measures announced in April 2025 — is essential for reducing long-term tax liabilities.
Asset Sale vs Share Sale – Key Considerations
Understanding transaction types is vital for planning the tax charge:
- Asset Sale Tax: The company sells assets (e.g. property, goodwill). It pays corporation tax on profits, and then shareholders may face personal CGT when extracting proceeds.
- Share Sale: Owners sell their shares directly to the buyer. This is often more tax-efficient but depends on buyer preference and the nature of the business.
Our team provides clear advice on which option best fits your circumstances, including those involving a business partnership or multiple business partners.
Trusts and Business Sales
Trusts are valuable tools in tax planning when approaching a sale. They can:
- Secure tax reliefs on assets before disposal
- Reduce exposure to both CGT and inheritance tax
- Protect wealth for future generations
- Provide flexibility on how and when beneficiaries receive funds
This ensures the taxes when selling don’t erode your hard-earned value.
Frequently Asked Questions.
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1. What is Business Property Relief?Business Property Relief (BPR) is an inheritance tax relief allowing certain businesses or interests in businesses to pass free of inheritance tax on death at either 100% or 50%. Requirements for 'relevant business property' include:
- Holding shares for at least two years
- The business being actively trading
- The business cannot be 'wholly or mainly' dealing in securities, stocks, shares, land, buildings, or making/holding investments
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THE BEST IN THE BUSINESS.
We have a proven track record advising entrepreneurs, family firms, and partnerships on the exit tax UK rules. Whether you are facing asset sale tax, need advice on the tax on sale of a business, or want to minimise your overall tax liabilities, we’ll guide you every step of the way.
Russell Kaminski
Partner and Head of Private Client
Lucy Cresswell
Associate
Alison Rocca
Partner
Jason Stanley
Partner
Holly Greensmith
Solicitor
Mark Dawson
Chief Executive Officer
Amanda McAlister
Head of Group Consumer Brands
Because we are here to help you.
Don’t let unexpected tax charges undermine your success. Our solicitors deliver expert strategies for managing exit tax in the UK, selling a business tax implications, and capital gains tax.
“Russ is a pleasure to deal with: responsive, accurate and extremely knowledgeable.”
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