Summary
Summary Notes for SGS 3 class
- Module
- Private Acquisitions
Summary of 2 pages for the course Private Acquisitions at BPP (Class notes)
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ACTIVITY 2Question 1:
If the BLS bid were successful, who would receive the consideration for the
Eurolearn shares and what tax would be payable by that person? How could that
tax liability be mitigated?
● Share or asset sale? Share sale
● Who is the seller? JP the founder of EL
● Is the seller individual or company? Individual
● What type of tax will seller pay? Capital Gains Tax
● Reliefs/ exemptions?
○ Business Asset Disposal Relief ('BADR')
● The target company must be a trading company - satisfied
● The individual disposing of the shares must be an officer or
employee of the target - satisfied
● the individual must hold at least 5% of the ordinary shares in the
target, carrying at least 5% of voting rights - satisfied
● the individual must be entitle to at least 5% of (a) the profits made
available for distribution on winding up, or (b) the disposal
proceeds if the company is sold - satisfied
● all of the above must have been satisfied for 2 years immediately
prior to disposal - satisfied
When BADR applies the rate of Capital Gains Tax is reduced from 20 - 10%.
The lifetime limit for BADR is £1 million. so the 1st £1 million is taxed at 10% and the
remaining proceeds are taxed at 20%.
Question 2
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