Ask PLC Home

Practical Law may have moderated questions and answers before publication. No answer to a question is legal advice and no lawyer-client relationship is created between the person asking the question and the person answering it. Where appropriate, you should consult your own lawyer for legal advice. Practical Law's employees are not practising solicitors or barristers. The Ask scope and rules apply.

Does the sale of a cash-rich company cause issues in relation to entrepreneurs' relief and to the transactions in securities rules?

Query on entrepreneurs' relief and transactions in securities rules. Clients are two individuals who together own all shares in a trading company and wish to sell it. Over the years profits have been left in the company such that of gross assets of around £3m, cash at bank is around £1.6m. Does this cash impact availability of ER, and is there any risk transactions in securities rules may apply? On the latter, am I correct in saying that if the sale is to an unconnected third party then post FA2010 rules there is now no possibility of the rules applying? On ER, the position seems a bit more nuanced, but essentially would you agree that if the cash is held in a bank account and not actively managed or invested then ER should be available?

Anonymous (Private practice)

Request a free trial

To access this resource and thousands more, register for a free, no-obligation trial of Practical Law. Register using the button below, telephone +44 (0)20 7202 1220 or e-mail info.practicallaw@thomsonreuters.com.

A free trial will give you:

Unlimited access to Practical Law online know-how
Thousands of market standard documents and clauses
Daily alerts and weekly update e-mails on key legal developments in your practice area
 

Register

Log in

To access this resource, log in below or register for free access.

Contact us

Our customer services team are available every working day 8.30am to 7pm (GMT).

{ "siteName" : "PLC", "objType" : "PLC_Doc_C", "objID" : "1248172251593", "objName" : "Does the sale of a cash-rich company cause issues in relation to", "userID" : "2", "objUrl" : "http://uk.practicallaw.com/cs/Satellite/resource/a-017-3440?null", "pageType" : "Resource", "academicUserID" : "", "contentAccessed" : "false", "analyticsPermCookie" : "2-3b01f5d1:15b0b2dd987:8c2", "analyticsSessionCookie" : "2-3b01f5d1:15b0b2dd987:8c3", "statisticSensorPath" : "http://analytics.practicallaw.com/sensor/statistic" }