Leave cash in the business in advance of a sale

Leave cash in the business in advance of a sale

In the run up to a sale, it may be tax efficient to minimise the amount of cash extracted from the company in order to build up a larger cash balance on exit. This should in turn increase the sale consideration received. The benefit is that the tax paid on increased sale proceeds will be less than the tax that would have been paid on dividends or salary if extracted pre-sale.

As always, careful planning is required to ensure valuable reliefs, such as Business Asset Disposal Relief, are not jeopardised as a result.

If you would like more information or would like to discuss your tax affairs in more detail please don't hesitate to contact our Tax Partners, Steve Crompton or Lucy Williams, on the details below:

Steve Crompton
Partner – Head of Tax
direct dial: 01942 292541
mobile: 07790 840394
email: steve.crompton@jsllp.co.uk
Lucy Williams
Tax Partner
direct dial: 01942 292543
mobile: 07807 053494
email: lucy.williams@jsllp.co.uk