Tax Planning Before Selling a Business

Start before negotiations

A sale process creates pressure. Once a buyer, advisers and a timetable are involved, there may be limited scope to change the underlying structure. A pre-sale review gives the owner time to identify issues, understand potential tax costs and consider whether any restructuring should happen before the sale.

Share sale or asset sale

The tax analysis can differ depending on whether a buyer acquires shares or individual business assets. The commercial objectives of buyer and seller may not always be identical. Understanding the likely transaction structure early allows tax considerations to be built into negotiations rather than dealt with after the headline price has been agreed.

Capital Gains Tax and reliefs

A disposal of business assets may give rise to CGT, but specific reliefs can apply where their conditions are met. Revenue’s current guidance on Revised Entrepreneur Relief provides a 10% rate for qualifying business gains, with a €1.5 million lifetime limit for qualifying disposals made on or after 1 January 2026. Retirement Relief can also be relevant in appropriate circumstances and has detailed conditions and thresholds.

The structure matters

The tax position can be influenced by the way the business is owned and by the nature of the assets being sold. Personal assets, investment assets and business assets do not necessarily receive the same treatment. Revenue also notes that some assets, such as investment assets and certain development land, do not qualify for Revised Entrepreneur Relief.

Prepare for due diligence

Tax planning is not only about the eventual CGT bill. A buyer will normally examine the company’s tax affairs, accounts, contracts and historic compliance. Outstanding Revenue matters, undocumented arrangements, unusual transactions or weaknesses in records can become commercial issues during due diligence. Preparing early can make the process clearer and help identify matters that need to be resolved.

What happens after the sale?

The owner’s tax planning does not necessarily end when the transaction completes. The use of the sale proceeds, future investments, retirement planning, family wealth and succession may all need to be considered. In some cases, the post-sale plan can be almost as important as the disposal itself.

Practical takeaway

Tax advice is most useful when it is connected to the decision the client is actually trying to make. The detail will vary from one business or family to another, but the principle is consistent: understand the objective, identify the relevant rules and consider the consequences before the decision becomes irreversible.

Property can change the shape of a business sale

Property is often one of the most valuable assets associated with an owner-managed business. Before a sale, it can therefore be important to understand whether property sits inside the operating company, elsewhere in the group or personally with the owners. The treatment of property can affect transaction structure, due diligence, valuation and the tax analysis. These questions are best considered before the sale process is advanced.