If you or your clients are thinking about selling their business in the next few years, the current tax landscape makes early planning more important than ever. With the possibility of changes to capital gains tax in the November 2025 Budget, owners might want to take proactive steps to secure value and reduce tax.
Some of the key planning points that business owners might look to consider well before a sale process begins are:
- Understand Your Capital Gains Tax Exposure
The potential sale of a company is one of the most significant tax events an owner will experience. Careful planning can have a substantial impact on the final proceeds.
Actions to consider:
- review eligibility for Business Asset Disposal Relief (BADR)
- ensure shareholdings meet the necessary conditions
- consider whether a spouse or partner should hold shares
- review the impact of any investor agreements or preference shares
- model outcomes under different possible CGT rates
- Review Your Company Structure
A sale can fail to achieve optimum tax efficiency if the structure is not prepared in advance. It might be worth considering whether you or your clients need:
- a holding company
- a group reorganisation
- separation of property or non-core assets
- a demerger to split trading activities
These steps usually need to be taken well ahead of a sale due to anti-avoidance rules and HMRC clearances.
- Employee Incentivisation and Option Schemes
Buyers often focus closely on employee incentives. They want to see that management is aligned and that key staff are incentivised to drive performance through to completion.
Well-structured incentive plans can also make your business more attractive to buyers.
- Clean Up the Balance Sheet and Records
During due diligence, buyers will scrutinise the company’s tax, financial and legal position. Weak records or unresolved issues can lead to price reductions or warranties and indemnities.
Some areas you might want to consider reviewing are:
- director’s loan accounts
- PAYE and NIC records
- VAT compliance
- R&D claims and supporting documentation
- intercompany loans and related party transactions
A pre-sale tax health check can avoid surprises and speed up the transaction.
- Protect Personal Wealth and Plan for Extraction
Once the sale completes, you and your clients may need a strategy for managing the proceeds. Before a sale it may be worth considering:
- using pension contributions or investment vehicles
- reviewing IHT exposure and succession plans
- using trusts or family structures
- modelling the tax impact of earn-outs or deferred consideration
Planning these steps early can significantly improve post-sale wealth outcomes.
Conclusion
Selling a business is a major milestone for a company, and tax will play a central role in shaping both the deal structure and the final proceeds you receive. To ensure there are no hidden surprises, owners might like to begin planning well in advance.
If you or your clients are considering a future sale or would like a pre-sale tax review, our advisory team can help you prepare effectively and protect value.