Business restructuring tax advice can transform a company’s future – whether through a merger, de-merger, acquisition, business sale, or internal reorganisation. Each path brings great opportunities but also complex tax challenges. Spherical specialises in guiding businesses and their owners through these transitions with strategic tax planning and meticulous compliance support.
Our goal is to help you achieve your commercial objectives in a tax-efficient way, ensuring you meet all HMRC requirements and avoid unexpected tax bills. From initial concept to completion, we work closely with you and your legal team to structure transactions correctly, obtain any necessary HMRC clearances, and optimise outcomes for both the company and its shareholders.
Mergers & Acquisitions – Tax-Efficient Deal Structuring
Another aspect of business restructuring tax advice is Mergers and acquisitions (M&A) which are high-stakes transactions that demand careful tax planning. Whether you are acquiring another company or merging businesses, we make sure the deal is structured for the best tax results. Our advisers analyse the proposed deal to determine the most beneficial approach – for instance, whether to structure it as a share purchase or an asset purchase.
This decision has major tax implications: in a share acquisition, the buyer pays 0.5% stamp duty on shares; an asset purchase allows cherry-picking assets and claiming allowances, but it may trigger Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) on transferred assets. We clearly explain these trade-offs and find a solution that minimises tax while achieving your goals.
We also structure mergers and share exchanges to be tax-neutral whenever possible. UK tax law allows certain business combinations to proceed without immediate tax charges if specific conditions are met. For example, a share-for-share exchange, where shareholders swap their shares for shares in the acquiring company during a merger can qualify for CGT deferral – meaning no CGT is due at the time of the exchange.
We prepare advance clearance applications to HMRC to confirm the transaction meets the criteria for such tax deferral or exemption. Obtaining HMRC’s approval in advance gives all parties certainty that a merger or acquisition will not inadvertently trigger a tax charge.
Similarly, if part of the purchase price is deferred or contingent, such as an earn-out or loan notes, we structure it to defer taxation where possible, and seek HMRC’s confirmation of the intended tax treatment. Additionally, a business sale can significantly change your personal financial landscape.
We coordinate with our Private Client Advisory team (see also our Inheritance Tax Planning service) to help you manage the proceeds wisely and tax-efficiently. In every M&A deal, our focus is on reducing taxes (CGT, corporation tax, stamp duty) so you can proceed confidently.
De-mergers & Spin-Offs – Separating a Business Tax-Neutrally
De-mergers involve splitting a company into two or more independent entities. Common reasons include separating distinct lines of business, preparing a division for sale, or simplifying a corporate structure. While de-mergers can be highly beneficial commercially, they must be implemented under strict tax rules to avoid unintended charges.
We guide companies through tax-efficient de-mergers, ensuring that the separation does not trigger unwanted tax bills for the company or its shareholders.
Our experts determine the best de-merger method for your situation – such as a statutory de-merger or a capital reduction de-merger. We carefully plan every step so the de-merger meets HMRC’s conditions for tax neutrality.
For example, each new company must carry on its own trade, and shareholders should maintain the same proportionate interests before and after – key requirements for obtaining relief. We then seek advance clearance from HMRC to approve the de-merger, ensuring anti-avoidance rules do not impose any tax charge on the reorganisation.
After clearance, we help implement the de-merger using all available tax reliefs. Assets or shares are transferred under provisions that defer or eliminate CGT and stamp duty on the reorganisation. We handle the necessary tax elections and paperwork, and work alongside your legal advisors to execute the de-merger exactly as planned.
The result is that you divide your company into the desired parts with minimal tax cost, allowing each new entity to move forward cleanly.
Business Sales & Exits – Maximising Your Post-Tax Proceeds
Selling a business can be the culmination of years of work, and smart tax planning is essential to maximise your net proceeds. If you are selling your company, for example, selling your shares, we start planning early to ensure you benefit from all available reliefs.
A crucial relief for many business owners is Business Asset Disposal Relief (BADR), which can reduce the Capital Gains Tax rate on a qualifying business sale. We assess your situation and help you meet the conditions for BADR – such as the required ownership period and shareholding percentage – so that you can take full advantage of this relief.
If instead your company is selling its trade or assets (with a view to winding down afterwards), we advise on the Corporation Tax due on the sale and then how to extract the remaining funds to you in the most tax-efficient manner. Often this is achieved via a Members’ Voluntary Liquidation (MVL), which enables the final distribution to shareholders to be treated as capital (taxed under CGT) rather than as income (dividends).
We guide you through the MVL process and secure HMRC clearance beforehand to ensure this treatment is respected – preventing any anti-avoidance rules from reclassifying the pay-out as a dividend for tax purposes.
For any sale, we also consider the structure of your deal to optimise tax. If you will receive part of the payment as something other than cash – for example, shares in the buyer’s company or an earn-out tied to future performance – we structure the agreement to defer taxation on those elements where the law allows.
There are provisions to postpone CGT when you receive shares or certain rights instead of cash, and we make sure all requirements are met and communicated to HMRC.
Internal Reorganisations – Streamlining Your Corporate Structure
Businesses often need to reorganise internally – for example, to simplify a group structure, create a new holding company, or transfer assets between subsidiaries. Even without outside parties involved, these internal changes can have tax consequences if handled incorrectly. We assist with corporate reorganisations to ensure they are tax-neutral and compliant with HMRC rules.
For instance, if you are inserting a new holding company above an existing company, we’ll structure the share-for-share exchange so that it qualifies for tax deferral (no CGT for the shareholders on that exchange). We obtain HMRC clearance confirming that the reconstruction meets the requirements, giving you confidence to proceed.
If you’re moving assets or whole businesses between companies in your group, we use intra-group transfer exemptions – the UK tax system allows 100% group companies to transfer assets without immediate tax on gains, and often without stamp duty, as long as certain conditions are met. We ensure those conditions are satisfied and handle all the necessary documentation to claim such reliefs.
We pay special attention to SDLT when property is involved in a reorganisation. Transfers of property, even within a group, can attract SDLT if not structured carefully. Our team will structure the transaction (and any related financing) to manage or eliminate SDLT costs.
Where appropriate, we seek non-statutory clearance from HMRC to confirm that no anti-avoidance provisions will apply to the arrangement. Throughout the reorganisation process, we coordinate with your solicitors to align the legal steps with the tax plan, and we prepare all required tax filings or elections to ensure HMRC formally recognises the reliefs.
We also remind you of any ongoing conditions so that the tax-neutral treatment remains valid.
Your Partner in Complex Transactions
Restructuring transactions are complex, but with Spherical as your partner, you can proceed with clarity and confidence. We bring deep expertise, extensive experience, and up-to-date knowledge to every case, and deliver advice in clear, actionable terms.
We recognise that every deal is unique. Our senior advisors take the time to understand your specific goals and concerns, then tailor a tax strategy to support them. As a boutique firm, we offer direct access to experienced experts who work closely with your other professional advisors to ensure all aspects of the transaction are aligned and efficient.
With Spherical on board, you can be confident that no tax-saving opportunity will be missed and no compliance detail overlooked. We handle the tax complexities so you can focus on the bigger picture. If you’re considering a business restructuring – or already in the middle of one – and want seasoned tax experts on your side, contact us today for a confidential consultation.
We will discuss your plans and show how our expertise can add value by providing business structuring tax advice.