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Management Buy-Outs and Secondary Buy-Outs
We advise management teams on private equity backed buy-outs and secondary buy-outs. We have been involved in these types of transactions for decades and as a result we are experts in the technical and commercial issues involved and explain them in a clear and user-friendly way. We work hard to find the best tax outcome for the management team whilst ensuring that the tax does not distract from the objective of getting the deal done.
We have worked opposite many of the most well-known private equity firms and are familiar with the approaches they take.
Key tax issues for management teams include:-
- whether they can rollover their gains into the shares/loan notes in the private equity vehicle (we will usually advise that an HMRC clearance is sought);
- whether there is any exposure to certain rules which can allow HMRC to tax part of the proceeds as a distribution such that income tax will be payable;
- minimising the income tax risks for the management team on the acquisition of their shares/loan notes in the private equity vehicle;
- the structure of the share classes which may need to have different features for different levels within the management team;
- structuring any ratchet arrangements; and
- protecting the management team in relation to the likely tax outcome of the ultimate exit.
Where not all members of the management team have the same tax profile, we can structure the deal so that different groups can plan around their own issues. Our skill is making sure the deal terms are structured in the most tax efficient way.
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