Tax Issues for MBOs

Course Overview

This course is intended for those involved in MBO transactions who need to have an understanding of the taxation pitfalls and opportunities that arise.

The course will focus in particular on the taxation treatment of the managers’ shares and the potential charges under the employment related securities legislation.

Course Content

Tax issues affecting the target business

• Acquisition of trade and assets or shares in target
• Possible tax charges if target company acquired
• Preserving trading losses

Taxation of Venture Capitalist/ Private EquityFunding

• Tax treatment of debt and equity
• Problems with “stranded interest” and transfer pricing
• Taxation of share buy-backs
• Taxation of share sale

The tax treatment of managers’ shares

• Interest on money borrowed to buy shares
• Capital gains treatment on eventual sale
• Availability of relief under Enterprise Investment Scheme
• Potential income tax charges under employment related securities legislation
• Complying with the “safe harbour” conditions in the memorandum of understanding between BVCA and Inland Revenue
• Structuring ratchets to avoid income tax charges on the manager shares

Using EMI options to recruit, retain and incentivise key staff

• Qualifying companies
• Conditions to be satisfied by employees
• Exercise conditions, forfeiture, restrictions
• Disqualifying events

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.