Some of the tax issues, which require professional expert valuation consulting includes:
- Purchase Price Allocations
- Capital Gains Tax
In transactions involving the sale of more than one company, an allocation of the purchase price to each company is required by both buyer and seller for tax, reporting or financing purposes.
The purchase price allocation sets the base cost of each company for the buyer and the sale proceeds for the seller. Such allocations are particularly important for global businesses operating in multiple tax jurisdictions.
The Appraisal Associates provides independent purchase price allocations for inclusion in financial statements and in tax returns. We perform these allocations either before, after or during the transaction depending on the clients' requirements.
The Appraisal Associates has extensive experience of undertaking purchase price allocation exercises having worked for both local and international companies. Our independence is paramount for commissioning such work. Under the strict independence rules which apply to all listed companies worldwide, auditors are prohibited from undertaking this valuation work.
Capital Gains Tax
Capital Gains Tax (CGT) charges occasionally arise under tax legislation following the sale or transfer of companies or shares.
The Appraisal Associates assists clients by:
- Providing our opinion of the market value of an asset in a transaction to set either the deemed sale proceeds or the base cost for CGT purposes.
- Assessing the level of tax that may be triggered by a potential transaction for negotiation or tax structuring purposes. This may be a current capital gains tax charge or a CGT charge that has been deferred and will be crystallized under the transaction as a degrouping charge based on the market value at the time of the original transfer.