Tax and the unquoted company

Article Abstract:

Accountants involved in the ownership changes of unlisted companies must analyze potential tax problems to ensure that unintended tax consequences will not adversely affect the results of the commercial deal. The accountant must also identify potential tax planning opportunities inherent in the transaction. Tax considerations for purchasers include: any possible tax claims arising from compliance with value added tax investigations; hidden tax liabilities; and taxes that become due on a company changing ownership. Tax considerations for vendors include: implications of warranties and indemnities; capital gains tax mitigation; and dividends. Tax planning opportunities lie in the areas of: stamp duty on earn-outs; procuring tax relief on capital losses from the purchase; and realizing rollover relief.

Accounting, Corporate taxes, Corporations, Great Britain

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Are they getting their share?

Article Abstract:

The UK's Inland Revenue grants approval to executive stock option plans that satisfy four conditions. These conditions relate to the types of stocks over which the options will be granted, the exercise price of the options, individual limits on these options and tax exemptions for the exercise of the options. Approved stock option schemes offer several benefits to corporate executives and directors. These include tax exemptions when the option is granted and exercised, and the imposition of capital gains tax and not income tax on the profits generated by the exercise of the option. The Revenue denies approval to executive share option schemes when they involve a special requirement on the sale of the shares of executives who leave the company.

Corporate directors, Tax policy

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Time for some fine tuning

Article Abstract:

The Chancellor of the Exchequer immediately responded to the publication of the Greenbury report by introducing significant changes to executive share options. These changes effectively eliminate the tax benefits of establishing approved executive share option plans. Chancellor Kenneth Clarke's amendments address such issues as the qualification for tax reliefs of options granted on or after Jul. 17, 1995, the imposition of an income tax charge relating to certain options, and exemptions to this income tax charge. These changes do not cover options granted under an approved SAYE option plan. The new rules suggest that the use of Funded Unapproved Retirement Benefits Schemes may be an effective way of providing equity participation.

Tax Law, Public Finance Activities, Laws, regulations and rules, Employee benefits, United Kingdom. Treasury

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