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Restructuring and reorganising a business is a critical point in any business’ lifecycle. Transactions of this nature are often high pressure, time sensitive and the tax implications will often be a significant consideration, with material implications for any affected parties.

The tax environment applicable to corporate reorganisations is complex. Carefully planning the process and carrying out robust due diligence is crucial to ensure that any tax reliefs are maximised, structures operate efficiently and effectively, opportunities and efficiencies are identified and maximised and any risks and pitfalls are avoided.

Menzies has a team of dedicated and specialist advisers who advise on all aspects of restructuring advisory for businesses. We work proactively with clients to ensure transactions are structured effectively to achieve any commercial objectives, whilst ensuring business and shareholder value is maximised through identification of any opportunities for tax efficiencies and effective tax risk management.

Structuring and Restructuring

There are a number of reasons why a business may benefit from being restructured, for example:

  • To achieve operational efficiencies, reduce complexity or create economies of scale.
  • To manage or mitigate different levels of risk that may exist in different parts of a business.
  • To aid in raising funds or incentivising employees, including in respect of specific parts of a business or the whole.
  • To separate or amalgamate business components, or to provide flexibility or tax efficiencies, when preparing for a sale.
  • To facilitate the merger of two or more businesses, or to allow for business partners to separate.
  • To complement or facilitate a strategy for succession of the business.
  • To improve business reporting and accountability.
  • Because business or personal objectives have changed since a structure was established.

Regularly reviewing a business’ operating structure is advisable to ensure that this remains aligned with the shareholders’ tax and commercial prerogatives remain aligned with the shareholders’ overarching commercial and personal objectives.

The tax environment applicable to corporate reorganisations is, however, complex, because a number of taxes are often applicable, and the way in which different taxes interact can create significant risks, as well as opportunities, that can be material. This is particularly the case where businesses are being separated or demerged, where property is involved and where transactions of this nature don’t tend to create cash and so any tax charges need to be separately funded. Careful planning is therefore necessary to identify and establish the feasibility of the most effective restructuring solutions, provide certainty to any relevant parties early in the process, to ensure tax and transaction costs are managed and that any opportunities for efficiencies are identified and explored.

Plan and Structure Corporate Transactions

Minimise tax exposures and maximise tax efficiencies through effective structuring

Our team of specialist tax advisers have extensive experience advising on corporate reorganisations, reconstructions, mergers and demergers, including to:

  • Advising on the effectiveness and appropriateness of different business and operating structures.
  • Assessing the tax cost and optimisation of restructuring processes, including in respect of corporate and shareholder taxes, stamp taxes, VAT and inheritance tax.
  • Assessing the feasibility of relevant options for restructuring and identifying structures and strategies to optimise the business depending on the shareholders’ objectives.
  • Designing the restructuring process and steps plans to minimise any tax costs and maximise any tax efficiencies achievable in respect of group reorganisations, mergers, partitions and demergers, as well as pre and post-sale restructuring including amalgamations, group simplification and post-acquisition integrations.
  • Advising on business valuations and capital structures.
  • Coordinating with HMRC to obtain any relevant HMRC clearances.
  • Assisting with communication restructuring objectives and process to key stakeholders, including financiers, investors, employees, etc.
  • Dealing with associated administration, reporting, disclosures, elections or relief claims, including in respect of personal, corporate and employment taxes, stamp taxes and VAT.
  • Providing practical, commercial and technical input to support in the implementation of complex transactions.
  • Ensuring your structure is optimised to achieve the shareholders’ medium and longer term objectives, including raising funds, offering share incentives and selling the business.

As a member of HLB International, we also have access to local tax experts in 157 countries worldwide, who can support on international and cross border transactions.

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