Minority shareholder retires selling equity

Case Study6th Apr 2020


Related services

Our Client 

Becoming increasingly remote in company operations, the minority shareholder of a long-established fishing company expressed his interest to exit the company and retire.  

The remaining company shareholders wished to purchase of the shares and at the same time wind-up an existing Partnership in order to consolidate operations. 

AAB were approached to advise on how to tax efficiently to achieve the above objectives and ensuring that no more than a fair market value was paid to the exiting shareholder. AAB were responsible for project management of the transaction to completion. 

Our Approach 

  • Negotiated an exit price with the exiting shareholder using our Corporate Finance team’s expertise in undertaking company valuations 
  • In relation to the company, we liaised with HMRC to gain Advance Clearance for the purchase of shares from the minority shareholder, ensuring the disposal would qualify for Capital Gains Tax treatment, achieving an efficient tax position for the exiting shareholder 
  • In relation to the Partnership, we confirmed the most efficient way to allow for the winding-up, including identification of the tax reliefs that were available 
  • Prepared a valuation for the Partnership and the Company, including the fair market value of the fishing operation consisting of vessels, Fixed Allocation Quota units and licences along with considering the value of minority shareholders’ interests 
  • Lead the implementation and project management of both transactions, including supporting the existing accountant with cessation accounts for the partnership 
  • Reviewed all legal documentation as prepared by lawyers, to confirm these were effective from a tax perspective and achieved the desired objectives and outcomes 

The Outcome 

  • Peace of mind for all parties that a fair market value was paid for the shares acquired from the minority shareholder 
  • Consideration given to all taxes including Capital Gains Tax, Income Tax, Corporation Tax, Inheritance Tax and VAT to ensure the transactions were as efficient as possible 
  • By project managing the transactions, we allowed the shareholders to focus on the “day-job” during the COVID-19 pandemic, ensuring all parties, including other professional advisers involved in the transaction, were aligned towards the key objectives and deliverables, allowing for the transactions to be completed in a timely manner 
  • AAB’s expert tax team highlighted practical steps that could be undertaken now to minimise tax liabilities in the future covering Capital Gains Tax and Inheritance Tax 


Related services

Sign up to updates

  1. Blog29th Jul 2022

    COVID recovery, labour shortages & supply chain issues: the resilience of Scotland’s food & drink sector

    In the last two years we have seen some of the most challenging times in business. In particular, the Scottish food and drink industry has been hit hard by varying restrictions imposed across the country. Despite these challenges, the industry…

    By Derek Mair

    View more
  2. Blog11th Mar 2020

    SeedPod – What does this mean for Scotland Food & Drink Businesses?

    At AAB, we have a dedicated team of Food & Drink specialists who hold a wealth of experience and knowledge of the sector – a nod to the significance of the industry in the context of the Scottish economy and to our business. Considering our involvement within the sector, we…

    By Derek Mair

    View more
  3. Blog12th Sep 2019

    Funding Growing Food & Drink businesses

    Fundraising for start-ups or early stage companies has always been a challenging task as anyone who has seen the plucky contestants enter the Dragons’ Den on the hit television programme can agree. However, with a high number of food and…

    By Derek Mair

    View more
  4. Blog4th Jul 2019

    Scotland Food & Drink – the £30 billion pound opportunity – supporting companies unlock their potential

    The Scottish food & drink industry is a globally recognised brand and continuing to strengthen this brand will be key to reaching the shared vision of the Scotland Food & Drink Partnership outlined in their “Ambition 2030” strategy. To achieve…

    By Derek Mair

    View more

Share this page