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This guidance note gives an overview of the tax impact of a company buying either the trade and assets of another company or acquiring the shares in the company in order for the business to expand.

A business acquisition can take the form of buying the trade and assets of the business as a going concern or buying the shares of the company which is carrying on the business. An advantage of buying the trade and assets is that there are no historic corporation tax liabilities being acquired but on the downside there will be a discontinuance of the trade which could have tax as well as commercial implications. The vendors of the business may prefer a share sale as it could allow them access to certain tax reliefs like business asset disposal relief but buyers are likely to favour an acquisition of trade and assets, the key differences for tax are set out in the Comparison of share sale and trade and asset sale guidance note. Other tax implications