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Sale of a Food and Drink Business

Our client is a food and drink producer based in Scotland. EQ recently started to act for the client as they had outgrown their existing advisors. At the initial meeting, the owner advised that a sale of one of the premier brands was a real possibility, though not imminently, with a price of between £1m and £1.5m possible. The company contained several diverse income streams and assets, which had apparently been thrown together over a period of time.

How we helped our client
The client’s lead partner explained the issues involved in making a sale of part of the business, including the pitfalls of having an untidy company not ready to be sold and containing items likely to put off a potential purchaser. After further discussion, it was determined that substantial shareholding’s exemption might be in point and therefore a new holding company was created into which were transferred the trade and assets not likely to be sold.

Fifteen months on, the key brand and related business held in the now clean subsidiary is about to be sold for £1.6m. Following the advice supplied, the disposal by the holding company of its subsidiary will be tax free, with the proceeds being used to repay some business debt and to fund the expansion of other product development.

Planning to sell makes the sale process much easier and can often lead to much better tax and other outcomes.

For more information or to discuss further, please contact the Transaction Tax Taxperts.

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