haysmacintyre advised on the sale of a UK group to a US private equity buyer. The deal value of up to £35m consisted of cash, buyer’s equity and earn out. We delivered detailed sales tax support throughout, including:
- Implementation of EMI options (HMRC valuation, legal documentation, HMRC reporting) in the run up to seeking a sale.
- Comprehensive analysis on whether shortening the Target’s year end increased the value of its tax attributes for the vendor shareholders (their total cash value equating to circa £3m).
- Drafting of tax asset schedule of the share purchase agreement (SPA), including EMI share option deduction relief, R&D, tax losses and US tax assets.
- Assisted in answering specific tax due diligence queries, including analysis of past share acquisitions by employees/directors to demonstrate that no significant tax risk existed, despite absence of US Section 431 income tax elections.
- Advice on US buyer acquisition structure (consisting of a chain of LLCs) and the risks to the vendor shareholders in qualifying for Capital Gains rollover.