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Haines Watts Birmingham Phone icon 0121 456 1613

Q: I am thinking about selling my company and there seems to be interest from overseas buyers. Is this a trend you are witnessing, is the interest likely to be genuine and what is the process?

A: The latest official figures show the value of foreign direct investment in the UK (inward investment) increased from £1,032.5 billion in 2015 to £1,199.5 billion in 2016 – largely explained by a pickup in inward mergers & acquisitions. Most was attributable to Europe, but US buyers have also been acquisitive.

This is partly due to Brexit with a weakened UK Sterling as it gives potential opportunities to pick up very good UK companies at a more favourable price.

When looking to sell a company there are many considerations. Look for more than one buyer be that in the UK or overseas as this can help drive up the price through competition. For owners of UK businesses interest from overseas extends the scope but there may be additional considerations down the line due to currency fluctuations.

Consider also what you are selling whether shares in your limited company or its trade and assets. Both have very different tax consequences. You may qualify for capital gains tax relief – entrepreneurs’ relief – if you are a sole trader or partner selling part or all your business or its assets, or you control at least 5% of a company. The relief effectively reduces the capital gains tax rate to 10% on the first £10m of gains you make over your lifetime from selling such assets. Any gains above this are taxed at 20%.

Appoint a lawyer to deal with the legal side. Alongside your accountant they will help you through the due diligence process involving questions around the financials and various legal contracts within the business.

Hopefully then the deal will go ahead. You may be required to stay with the business for a period to ensure a smooth handover but after that you should be able to ride off with your money.

A warning: selling a business is rarely an overnight process. Keep your eyes on the business to ensure it does not lose business during the process.

Want to know more? Call us on 0121 456 1613 or email birmingham@hwca.com

About the author

Andrew Jones

Andrew joined Haines Watts Birmingham Office in 1997 just after he qualified as a Certified Accountant having trained straight from school at the age of 16 with a smaller firm.  He quickly moved up the ranks and has been a partner since 2005.

Andrew is a serial networker and prides himself in developing excellent relationships with clients, many of whom he has acted on behalf of for a long time.  Andrew likes to think of himself as not just being an accountant but more of an advisor to his clients and really enjoys getting involved in their businesses to help them achieve their medium to long term goals.

As well as advising his clients Andrew is also the West Midlands Regional representative for Geneva Group International (GGI) a global alliance of independent professional firms so he is very well placed to help businesses on an international level, be that exporting or even setting up an overseas operation.

On a personal level Andrew has been happily married since 1993 and has two sons.  He is a serious petrol head and can often be found doing track days.  On a more peaceful note Andrew can also often be found in the kitchen cooking a wide range of different foods.

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