Selling a professional services firm? Protect what you've built.

Members of an LLP can qualify for the relief when they dispose of their interest in the business, but the conditions differ from those for shares in a company. Some firms incorporate before a sale. The timing and the tax consequences need careful review.

Earn-outs are common because so much of the value sits with the people. If the earn-out depends on you staying and working, HMRC may tax it as employment income rather than capital. Linking it to business performance, not your continued employment, usually helps.

Rollover into the buyer's shares is common with private equity buy-and-build platforms. It can defer tax and give you a second payday. But the value of that equity depends on the platform's growth, and your share can be diluted as the group makes more acquisitions.

If you sell shares in a company, your gain is usually subject to capital gains tax. Where you qualify for Business Asset Disposal Relief, the rate is 18% from 6 April 2026 on up to £1m of lifetime gains. Gains above that limit, or gains that don't qualify, are taxed at the main rate of 24%.

Usually only if they meet all the conditions, including holding at least 5% of the shares and votes and a 5% economic entitlement for two years before the sale. Staff with smaller holdings normally pay the main capital gains tax rates. Shares acquired through EMI options are an exception, as they can qualify without the 5% test.

Yes. The £1m limit applies to each individual over their lifetime, not to the company. So a spouse or family member who holds shares can have their own limit, but only if they meet every condition in their own right, including the officer or employee condition.

Sellers usually prefer a share sale, because the gain is taxed once, in their hands. If the company sells its business and assets instead, the company pays corporation tax on its gain, and getting the cash out to the shareholders can then be taxed again. Buyers sometimes prefer an asset purchase, so the choice is often part of the negotiation.

It depends. Dividends are taxed as income, often at higher rates than a capital gain on the sale. But taking cash out before the sale also reduces what the buyer pays for the company. The right answer depends on your tax position and how the price is calculated, so it is worth modelling both.

Usually, yes. Buyers' due diligence often looks closely at whether contractors and freelancers are correctly treated as self-employed, and whether PAYE has been handled properly. Problems found can lead to a lower price or a specific indemnity in the sale agreement, so it helps to review this before the sale starts.

Ideally before you agree heads of terms. The headline structure of the deal, such as the split between cash, earn-out and rollover, is usually set at that stage and is hard to change later. Some relief conditions also need to be met for two years before the sale, so earlier advice gives you more options.