Practice guide: Taxing negative consideration

James Smith

Alistair Craig

Upfront payments from seller to buyer on share sales (so-called negative consideration) are on the increase. James Smith and Alistair Craig examine the tax consequences

We often see sellers who wish to dispose of an underperforming business finding that they are required to give away the subsidiary or even being required to make a payment to the buyer.

While this may seem an odd thing for a seller to do it can often be the case that the costs for a seller in shutting down a company especially where the seller does not want to put the subsidiary into insolvent liquidation will be greater than the payment it would need to make to a buyer.

The payment the...

If you or your firm subscribes to Taxjournal.com, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this article in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Upfront payments from seller to buyer on share sales (so-called negative consideration) are on the increase. James Smith and Alistair Craig examine the tax consequences

We often see sellers who wish to dispose of an underperforming business finding that they are required to give away the subsidiary or even being required to make a payment to the buyer.

The payment the...

If you or your firm subscribes to Taxjournal.com, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes: