In 2017 my business partner and I completed a MBO of our company. The company was valued at £1.9m and I already had a 10% shareholding and my partner 5%, a third investor also joined us. We set up a separate company as the acquisition vehicle and the the purchase was completed using a term loan and invoice discounting facility from the bank, plus £25,000 cash from each of the shareholders.
We have now sold the company and the question has arisen regarding the chargeable gain as we have received two completely different answers from the same tax accountants!
Is the gain the difference between the £1.9m purchase price and the sale price (less costs of sale) or is it the difference between only the value of our original shares (plus the cash) rolled over into newco and the sale price?
Any advice gratefully received.
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