Acquisitions & Mergers Advisory Services | Tax Planning

Book Smart Accountancy & Tax Advisors Ltd

Acquisitions and Mergers

Whether you are looking to acquire another business, merge with a competitor, or position your own company for sale, the tax and financial implications of a deal can be significant. Getting the structure right from the outset can make the difference between a transaction that works financially and one that creates unexpected liabilities, disputes, or complications further down the line.

At Book Smart Accountancy, we support business owners and management teams through the full lifecycle of a transaction. From early-stage planning and structuring advice through to due diligence support, completion, and post-deal integration, we provide the financial and tax expertise needed to give your deal the best possible foundation.

On the buy side, we help you understand the true financial position of a target business, identify potential risks, advise on the most tax-efficient acquisition structure, and ensure that the deal terms reflect the financial reality of what you are acquiring. Whether you are buying shares or assets, the tax treatment is very different and the choice can have a lasting impact on the value of the investment.

On the sell side, we work with business owners to ensure their company is in the best possible shape before going to market, advise on the tax consequences of different deal structures, and help maximise the after-tax proceeds from a sale.

Deals rarely go ahead without challenges, but with the right advisers alongside you from the start, you can move forward with confidence and make decisions based on clear, accurate financial information.

Book Smart Accountancy & Tax Advisors Ltd

Things to Know or Watch Out For with Acquisitions and Mergers

Share Purchase vs Asset Purchase Has Very Different Tax Consequences - Buying shares gives you ownership of the company, including all its liabilities. Buying assets allows you to cherry-pick what you acquire but typically results in different tax treatment for both buyer and seller. The right structure depends on the circumstances of both parties.
Tax Due Diligence Is Essential Before Buying a Business - A target company may have historic tax liabilities, Revenue disputes, undisclosed payroll obligations, or VAT issues that are not apparent from the headline financial information. Thorough tax due diligence protects you from inheriting problems you were not aware of.
Entrepreneur Relief Can Significantly Reduce CGT on a Sale - If you are selling shares in a qualifying company and have met the relevant conditions, Entrepreneur Relief can reduce the Capital Gains Tax rate on the first EUR 1 million of gains from 33% to 10%. Planning your exit to qualify for this relief can be very valuable.
Stamp Duty Applies on the Purchase of Shares and Assets - Stamp duty is payable on the transfer of shares (currently 1%) and on certain asset purchases. These costs need to be factored into your deal pricing and financing from the outset.

Earn-Out Arrangements Have Complex Tax Treatment - Where part of the purchase price is contingent on future performance, the tax treatment of earn-out payments for both buyer and seller can be complex and needs to be addressed in the deal structure and documentation.
Warranties and Indemnities Should Be Informed by Tax Due Diligence - The warranties and indemnities negotiated in a share purchase agreement should reflect the findings of tax due diligence. If historic tax risks have been identified, appropriate protection should be sought from the seller.
Post-Acquisition Integration Has Tax Implications - Merging systems, consolidating legal structures, and integrating employees after a deal can all have tax consequences. Planning the integration carefully avoids creating new issues once the deal has closed.
Finance Costs on Acquisition Debt May Not Always Be Tax Deductible - The tax deductibility of interest on loans used to fund an acquisition depends on the structure of the deal and how the debt is held. Getting the financing structure wrong can result in a significant loss of tax relief.

Book Smart Accountancy & Tax Advisors Ltd

Frequently Asked Questions

This is one of the most important questions in any acquisition and the answer depends on factors including the historic liabilities of the target, the tax position of both buyer and seller, the nature of the assets being acquired, and the deal terms. We advise on the optimal structure based on your specific circumstances.

Tax due diligence is a review of the target company's tax history and compliance to identify any historic liabilities or risks that could affect the value or structure of the deal. It is strongly recommended for any acquisition of meaningful size. It protects you from inheriting unexpected liabilities and informs the warranties and indemnities you should seek from the seller.

Entrepreneur Relief reduces the Capital Gains Tax rate on the first EUR 1 million of qualifying gains from a sale of business shares from 33% to 10%. To qualify, you must have owned at least 5% of the shares in the company for a continuous period of three years, and the company must have been a trading company during that period. The relief can represent a very significant saving for business owners selling a company they have built over time. We advise on whether you qualify and how to structure the sale to preserve the relief.

Preparation typically begins twelve to twenty-four months before a planned sale. It involves ensuring the accounts and financial records are in good order, addressing any outstanding tax or compliance issues, reviewing the legal structure of the business, considering whether any assets should be separated out, and taking steps to make the business less dependent on the owner personally. Starting early gives you time to improve the business's attractiveness and resolve any issues that could reduce the sale price or complicate the deal.

Stamp duty on the transfer of shares in an Irish company is currently 1% of the consideration paid. Stamp duty on the transfer of non-residential property or business assets varies depending on the nature of the assets. These costs need to be factored into your deal planning from the outset. We calculate the stamp duty applicable to your specific transaction and ensure it is paid correctly and on time.

The deductibility of interest on borrowings used to fund an acquisition depends on how the financing is structured and in whose hands the interest is incurred. Where the acquisition is made directly by a trading company, relief may be available. Where a holding company is used, specific rules apply. Getting the financing structure right before the deal is done is important, as restructuring afterwards can be complicated and costly.

If Revenue opens an inquiry into the target company after you have acquired it, you as the new owner are exposed to any resulting liability unless you have appropriate warranty and indemnity protection from the seller. This is why thorough tax due diligence and well-negotiated deal protections are so important. We advise on the appropriate scope of warranties and indemnities and can assist you in managing any post-completion Revenue inquiry.

The timeline varies considerably depending on the complexity of the transaction, the readiness of both parties, and the availability of information. A straightforward acquisition between willing and well-prepared parties might complete in two to four months. A more complex deal involving significant due diligence, regulatory approvals, or financing arrangements can take six months or longer. We work to keep the process moving efficiently and advise you at every stage so you are never left uncertain about where things stand.