New Business aquisition

[donnieg]

Hi
A Newbie here so looking for some Tax advice. I am to buy a business in 3 annual instalments. Can anyone offer some suggestions on keeping down the tax I pay on the transaction. I am buying a Ltd company as the owner is retiring (I will be a sole trader). Having looked around it appears I may have to pay VAT up front on whole transaction rather than annually when lump sum is paid to previous owner. Is this correct as I have not budgeted for this. Any suggestions???
D

[les35]

If you are buying a business the TOGC rules should apply, so that the transaction is VAT free. You will need to make sure the various conditions are fulfilled. Ideally the contract for your purchase of the business will provide for this arrangement.
The fact that payments are made in installments will not affect this.

[donnieg]

Hi
Thanks for the reply, it has set my mind at rest and clarified a point.

[section 44]

If you are buying a business the TOGC rules should apply

I am buying a Ltd company

Are you buying a business (i.e. assets etc) or shares in a company? If the latter then the TOGC rules are not in point but in any event VAT is not due on share transfers.

I will be a sole trader

If, as you said earlier, you are buying a company then how do you propose to extract the business from that company?

[donnieg]

IT is an asset purchase agreement, not buying the company

[bd6759]

I am buying a Ltd company

IT is an asset purchase agreement, not buying the company

You need to be clear about this.

[donnieg]

My original post having looked at it again does confuse things but it is an asset purchase and definitely not the company, both parties are clear about this. Thanks