Guest article

Ispeak to hundreds of business owners every month who always want to know

What’s my business worth?

How long will it take to sell?

How much will it cost?

Why should I work with Intelligent?

What happens next?

The short answers are depends, depends, depends, depends and ‘we make a plan’!

The variables in valuing and selling a business are many, from the obvious – sustainable performance, trading history, future opportunity and company structure to the personal – reason for sale, retirement plans, desired timeframe, acceptable deal structure, extenuating circumstances the list goes on…. and this is before we factor in the buyer’s circumstances.

The seller’s business structure and industry, personal circumstances and future plans will all play a part in the type of deal they accept and of course, the tax due on a successful sale.

I set out some of the common questions I’m asked.

Q. I am receiving an initial payment followed by deferred payments over a number of years. Do I pay tax on each instalment received?

A. Unfortunately not. For capital gains tax purposes the initial contract date is the date of disposal. So if the contract date is 31 March 2023 with an initial payment of £100,000 paid initially and 5 payments of £100,000, the whole £600,000 is taxable in the 2022/23 tax year.

Q. When is the best time to think about selling a business?

A. The short answer is ‘when you start it’! A business can take 6-24 months to sell so early planning is essential so that the best price is obtained and the tax position mitigated as far as possible. Often sellers don’t think about tax implications until they’ve accepted an offer, when it may be too late to implement a successful tax planning strategy and can cause the sale to fall through.

Over 1,000+ Businesses Sold. Rated Excellent on Trustpilot. Experienced Business Sales Team.

If you’re considering buying or selling a business, get in touch with myself or one of the team at Intelligent for no-obligation advice.

At Intelligent Business Partners, we are experts in the entire business sales process. We know the reason for a business sale varies.

Our experienced director-led team will take the time to fully understand you and your business, to build a bespoke and thorough plan to deliver a successful timely sale, whatever your motivation.

As part of our approach, our expert team will provide support and guidance throughout the sales process, from enquiry to completion. With access to our board of trusted partners, including wealth management, tax advisors and other professional services.

No matter the sector or size of your business, our proven approach, paired with our dedicated expert team, delivers a seamless transaction with confidential support 24/7.

Author Mark Fitzgerald-Cooke Managing Director Intelligent

0113 487 9478

07399 158 143 mark.fc@intelligent. co.uk www.intelligent.co.uk

Q. How do I set the sale price?

A. How much do you need from your business sale? Does the performance of the business now support a valuation to achieve your target sale price? If not, can you achieve growth through operational efficiencies or is a top line increase required? Is it time for an acquisition, recruitment or to speak to a business growth specialist?

Q. Should I sell the shares in the company or the assets?

A. Selling the shares in the company will usually be most tax efficient but the buyer will want guarantees that there are no undisclosed liabilities in the company. This is all usually taken care of in a legally binding Share Purchase Agreement prepared by lawyers.