We provide independent tax support to management teams of businesses which are going through any form of private equity investment transaction. Our focus in this role is on the incentive interests that management teams hold (or will hold) in the business alongside the private equity investor, to ensure that the related tax implications are well understood by management and, as far as possible, safeguarded and optimised throughout the process.
We achieve this by working very closely with management’s legal and commercial advisers at all stages of a transaction process, from early review and input into offer round bids, assistance with the negotiation of the specific deal terms relating to management, and then rigorous checks of the legal documentation prepared to execute the agreed transaction. We have supported management teams in this way on in excess of 250 career transactions.
Once a transaction has completed, we ensure that the management team’s self-assessment tax return compliance is handled promptly, robustly and uniformly, with appropriate disclosure notes and tax computations. Further, if management teams have experienced a full or partial cash realisation event on a private equity transaction, we can introduce them to trusted wealth management and financial advisers in our network.
We advise vendors (whether an individual, a company, a trust or otherwise) on the tax implications and tax structuring considerations of selling a business, or a stake in a business, across the full range and scale of business sale events.
We work with our clients at all stages of a business sale process, including several years in advance of a transaction to review current ownership structures from a tax perspective and provide recommendations on any pre-sale steps or actions that could be considered.
We play a critical role on the transaction itself, reviewing and commenting on all proposed terms and draft legal documents from a vendor tax perspective, working alongside and collaboratively with other professional advisers also engaged to support the vendors.
In situations where a full or majority sale of a business to a third-party is not being pursued or desired, we help business owners understand and explore alternative exit transactions, most typically either a Management Buy-Out or a sale of the business to an Employee Ownership Trust. With careful tax structuring and planning, such transactions can be implemented to meet the commercial objectives of the parties in a tax efficient manner.
We advise companies and individuals in connection with all key capital and legal structure related events during the business lifecycle. These highly commercial events always introduce tax complexities and tax considerations at all stakeholder levels, including owners, employees and the business itself.
Our work involves reviewing and understanding the starting commercial terms for these events and then identifying the alternative ways that the intended commercial outcome could be achieved. We then analyse those alternatives to identify the most tax efficient approach within the parameters of prevailing tax legislation and HMRC practice guidelines.
Typically, we will take a two-phased approach. To begin with, we will carry out a feasibility analysis and present possible options for consideration by our client and their other professional advisers, prompting discussion. Through careful review of the feasibility analysis, we provide advice to help our clients choose the best way forward. We then move into the second phase of our work which is a more detailed exercise to support the implementation of the chosen approach. Here, we will prepare a comprehensive but user-friendly steps-plan and tax advice report which provides a clear reference document and roadmap for lawyers to follow and use as a basis for drafting relevant legal documentation and for wider stakeholders and their advisers to understand the way forward. Wherever possible and permitted, we will seek to obtain advance “clearance” from HMRC to eliminate certain technical tax risks that may relate to the steps and, finally, we oversee the execution of our steps-plan by carefully reviewing and providing input into the draft legal agreements.
We provide end-to-end support to our clients in the implementation of equity-based incentive schemes.
Typically, we initially work with our clients with the headline design of the scheme. In the first instance, we seek to determine the optimum tax and legal structure for the scheme in the context of our client’s commercial fact pattern and objectives. We typically document the key attributes of the proposed plan in a concise term sheet.
We then introduce our clients to trusted valuation and legal experts in our network, and coordinate their input through to implementation. The early involvement of a tax valuation specialist is critical, as the objective is to deliver an equity award that has a relatively modest upfront value, but delivers significant returns if key commercial metrics are satisfied. In that context, there is often a need to iterate the proposed terms of the award to achieve the best overall outcome.
Where an equity-based incentive cannot deliver the entirety of the desired commercial award, or is not an appropriate solution, we can assist with the implementation and design of shadow/phantom plans.
Finally, we work with trusted lawyers to turn the proposed awards into a legal reality, before supporting our clients with any post-implementation reporting requirements.
We assist our clients with the management of the wealth they have created. In essence, this involves putting in place structures for our clients that maximise their net of tax investment returns and safeguards wealth for future generations.
In particular, the significant changes to inheritance tax that were announced in the Autumn Budget 2024 mean that all business owners should be actively considering strategies to safeguard family wealth. This could involve making gifts to the next generation, putting in place investment structures with shared ownership amongst family members, and/or emigration. Individuals who formerly benefitted from the remittance basis regime must also carefully consider their cash requirements in the UK given the ability to remit funds tax efficiently for a period of three years from 6 April 2025.
We work with our clients on an ongoing basis, meeting regularly to discuss their wider affairs and reviewing implemented strategies to ensure that they remain fit for purpose.
We can assist our private clients with any interactions that they may have with HMRC, including the preparation and submission of self-assessment tax returns. For corporate clients, we can assist with equity incentive related compliance matters, such as the preparation and submission of employment-related securities returns.
However, we typically tailor our support to areas of complexity and/or sensitivity, so that our clients can optimally leverage our knowledge and expertise. In this context, we regularly help our clients disclose complex transactions to HMRC on their self-assessment tax returns through the preparation of comprehensive narrative disclosures. This limits the period in which HMRC can legitimately raise an enquiry, thus providing our clients with certainty/closure in the shortest possible timeframe. This approach also enables our clients to retain the services of any long-term trusted accountants, as we can simply feed into the tax return preparation process, rather than owning it.
We also support our clients with transaction related HMRC enquiries. In our experience, the quickest route to resolving HMRC enquiries is to present the technical position in a logical and easily understandable matter, carefully referencing legislation and HMRC guidance notes. We seek to work collaboratively with HMRC, as we do with all stakeholders, towards the common goal of reaching a resolution.
All tax services provided relate to UK taxation only.