Con sider the tax im­pli­ca­tions

Finweek English Edition - - MONEY -

Of­ten when sell­ing their busi­nesses, own­ers will make the mis­take of not think­ing about how it will af­fect their next tax re­turn. In par­tic­u­lar, it is far more ben­e­fi­cial from a tax point of view to sell an en­tire com­pany than to just sell its as­sets.

“For an ac­quirer, par­tic­u­larly if they are bor­row­ing money, it is far more ef­fec­tive to set up a new com­pany and put the as­sets and debt into that en­tity,” Gran­tham says. “But there is a big dif­fer­ence in the tax im­pli­ca­tions for the seller be­tween an as­set sale and com­pany sale.”

Ad­vi­sory part­ner at Citadel Chris­telle Louw says it is also vi­tal to con­sider the struc­ture of the owner’s in­vest­ment in the com­pany be­cause cap­i­tal gains will be taxed dif­fer­ently depend­ing on whether it is held per­son­ally, in a hold­ing com­pany

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.