Get your group ready to sell, before the buyer arrives.

Ideally two years or more. Business Asset Disposal Relief looks at the two years before a sale, the substantial shareholding exemption needs a 12-month holding of a trading company, and SDLT group relief can be clawed back if a property-owning company leaves the group within three years. HMRC's guidance on the new main purpose test also favours restructuring that is completed well before a deal and then left to run. Starting early keeps every option open.

Sometimes, but the options narrow. Once a buyer is identified, some reliefs stop working: stamp duty relief on a share exchange can be denied where there are arrangements for someone to obtain control of the new holding company, and SDLT group relief is not available where there are arrangements for the company to leave the group. Every step taken close to a sale also needs a clear commercial reason. A late restructure is possible, but it needs careful design.

It depends on how you want to sell. A holding company lets you sell a subsidiary with the substantial shareholding exemption, so the proceeds arrive in the holding company free of corporation tax, or sell the whole group with Business Asset Disposal Relief on your shares. Inserting it early, with HMRC clearance, gives you the choice. Inserting it on the eve of a sale, purely to change the tax result, is much harder to justify.

Usually, yes. Since 26 November 2025 the share exchange and reconstruction reliefs have been subject to a main purpose test rather than the old bona fide commercial reasons test. HMRC's guidance says that restructuring so a later share sale qualifies for a relief, such as separating investment and trading activities, is not caught where the relief's conditions are met throughout the relevant period after the restructuring. Timing and genuine separation are what make it work.

The usual options are a dividend to shareholders, which is taxed at 10.75%, 35.75% or 39.35% in 2026/27, or moving the cash up to a holding company as a tax-free intra-group dividend and keeping it in the group. A third option is to separate the cash into a sister company through a demerger. Which works best depends on whether you want the cash personally now, and on how the buyer is pricing the deal.

Yes, and many sellers do, because buyers often want the trade but not the freehold. The property can be separated into a company owned by the same shareholders through a demerger, or distributed to the shareholders as a dividend in specie. A demerger is usually preferred, because a dividend in specie of property is normally taxed as income on the shareholders. SDLT and any earlier group relief claims need checking first.

A hive-down moves a trade, or part of one, into a new subsidiary, so that a buyer can purchase the shares of a clean company containing only what it wants. The transfer between group companies is normally at no gain and no loss, and the seller can then sell the new subsidiary's shares, often with the substantial shareholding exemption. It is common where a group is selling one division but keeping the rest.

It depends on what the buyer wants and what the existing company carries. A hive-down lets the buyer acquire a new company containing only the chosen business, leaving old liabilities, surplus assets and other activities behind with you. But contracts, employees, licences and property all have to move, which takes time and can cost SDLT. Selling the existing company is simpler, but the buyer will want wider warranties and indemnities to cover its past.

Usually not for the seller. On an asset sale the company itself pays corporation tax on the gains on its assets, and the substantial shareholding exemption doesn't help because it only covers disposals of shares. The money is then still in the company. Buyers sometimes prefer assets to avoid inheriting history, which is one reason a hive-down is used: it turns an asset deal into a share deal.

Often, yes. SDLT group relief is not available where there are arrangements at the time for the purchasing company to leave the group, and relief already given is withdrawn if it leaves within three years while still holding the property. So moving a freehold into a subsidiary shortly before selling that subsidiary will usually cost SDLT at market value. Where property is involved, it is often better to restructure long before a sale or leave the property where it is.

If you sell the holding company's shares, you pay capital gains tax personally, with Business Asset Disposal Relief at 18% on up to £1m of qualifying gains. If the holding company sells the subsidiary with the substantial shareholding exemption, there is no corporation tax on the gain, but the cash sits in the holding company and is taxed when you take it out. The right answer turns on what you plan to do with the money.

It stays in the holding company, free of corporation tax on the gain if the substantial shareholding exemption applied. You can reinvest it, use it to start or buy another business, or extract it over time as dividends. Be aware that a holding company sitting on cash after a sale may stop being a trading company, which can affect Business Asset Disposal Relief, Business Relief for inheritance tax and the corporation tax rate it pays.

A members' voluntary liquidation can turn the cash into a capital distribution, which may be taxed at capital gains tax rates. But an anti-avoidance rule can tax liquidation distributions as income where the shareholder holds at least 5%, the company is close, and within two years the shareholder carries on a similar trade or activity, if a main purpose is to avoid income tax. Plans after the sale need to be thought through first.

Clearance is not compulsory, but it is normally obtained for any share exchange, demerger or reconstruction ahead of a sale. Applications under section 138 (capital gains) and section 701 (transactions in securities) are usually made together, with section 1091 added for a statutory demerger, and HMRC respond within 30 days. Buyers and their advisers will expect to see the clearance letters in the due diligence pack.

The buyer's advisers will review how the group was put together: share exchanges and their clearances, stamp duty claims, intra-group transfers that could trigger degrouping or SDLT clawback, and whether the companies have always been trading. They will also check dividends, loans to shareholders and corporation tax filings. Problems found in due diligence usually lead to price reductions, retentions or specific indemnities, so tidy records matter.

Tax warranty and indemnity claim periods in a share sale agreement are commonly four to seven years, depending on what is negotiated. That means any weakness in a pre-sale restructure can come back to you after completion. Getting HMRC clearance in advance and keeping a clear paper trail of the commercial reasons for each step reduces the risk of a claim, and makes the warranty negotiation easier.

It can if it is not planned. Converting, cancelling or reorganising shares is usually a reorganisation that defers capital gains, but changes that move value between shareholders can be treated as disposals or gifts, and changes made shortly before a sale can affect the 5% personal company test for Business Asset Disposal Relief. Value shifts also raise transactions in securities questions. It is worth reviewing share rights at least two years before you expect to sell.

It can. Business Relief is normally lost once there is a binding contract to sell the shares, because the value is about to become cash. Separating property or investments before a sale changes which companies qualify, and cash held in a holding company after a sale will not usually qualify at all. If inheritance tax matters to you, the restructure and your estate planning should be looked at together, ideally before a deal is agreed.

You will normally need a tax adviser to design the steps and obtain clearance, a corporate lawyer for the share exchange, demerger or hive-down documents, and your accountant for the accounts and filings. Your corporate finance adviser should know the plan, because it affects what is being sold. We work alongside your existing advisers, and our sister firm Transaction Tax Partners supports the deal itself.