Tax Advisory
Tax is a key component of any business restructuring and should be considered at the earliest opportunity to ensure efficiency and preserve maximum value for your stakeholders.
With in-depth tax restructuring knowledge and experience across all sectors, Teneo supports businesses across the globe in their restructuring endeavours, both preserving and creating value through tax efficient structuring and planning.
Latest Financial Advisory Insights
Teneo Insights Series UK: What is Ahead for the Consumer in 2023?
The UK narrowly avoided recession in 2022, and the most recent forecasts for 2023 suggest a shallower recession than was anticipated last November. Although inflation is forecast to fall, the UK economy still faces a number of challenges, including rising interest rates, wage pressures driven by inflation and a tight… Read More
2023 UK Economic and Consumer Outlook
The UK narrowly avoided recession in 2022, and the most recent forecasts suggest low/stagnant growth, with the UK ultimately avoiding a technical recession that appeared inevitable in November when the country was still reeling from the impact of the previous Government's "mini budget." While inflation is forecast to fall, we… Read More
UK Independent Hospitals: The Next Challenge
The UK private healthcare market has seen a rebound in 2021 and 2022 post-Covid-19, driven in part by a surge in self-pay patients. A record number of people are opting to pay for their treatment privately to avoid long wait times in the NHS and access the quality and expertise… Read MoreOur Services
Debt Restructuring Transactions
Mitigating Cash Tax on Debt Forgiveness
It is critical to avoid cancellation of indebtedness income. Various exemptions exist but require careful planning to ensure they apply.
Avoiding Tax on a Debt Buy-back
Tax rules can trigger a deemed release on a debt buy-back or where a lender is or becomes connected to a borrower when the debt is impaired.
Preserving Value in Tax Attributes
Existing tax losses can be forfeit on a change of ownership if there is also a major change in the nature or conduct of a business’ trade or a significant increase in its capital.
Navigating Accounting Issues
A modification of debt terms can result in taxable accounting credits to a company’s income statement. “Substantial” modifications resulting from corporate rescues are exempt, but advice is essential.
Mitigating the Risk of Secondary Liabilities
Tax legislation often contains secondary liability provisions whereby unpaid tax can be charged to a third party (new owners, other group companies, even directors personally).
Minimising Tax as a Transaction Cost
If a restructuring transaction involves the sale of companies, whether businesses or assets (see below), minimising capital gains and transaction taxes is critical to avoid further value leakage to stakeholders.
M&A Transactions
General Transactional Issues
- Devise and deliver tax-efficient overall deal structures in an accessible format.
- Real time input to negotiations between principals to secure best tax outcomes.
- Support case for tax relief for transaction costs and recovery of associated VAT.
- Seek Revenue authority clearances as appropriate.
- Contribute to negotiation of legal documentation.
Share Disposals
- Mitigate tax on gains on disposal of shares.
- Identify and mitigate tax risks arising from historic transactions (avoid deferred tax liabilities that result in “price chips”) .
- Preserve and maximise value from tax losses and other attributes.
- Avoid de-grouping charges relating to previous intra-group transfers of assets.
- Consider what tax warranties or indemnities may be offered.
Asset Realisations
- Mitigate tax on gains on disposal of assets.
- Realise cash tax value on sale of deferred tax assets, particularly tax depreciation.
- Mitigate stamp or other capital duty costs to avoid forced price adjustments.
- Mitigate irrecoverable VAT/sales taxes.
- Consider packaging assets in an SPV if this helps preserve value.
Structural issues
- Design tax efficient holding structures.
- Devise optimal financing structures for each jurisdiction.
- Minimise withholding tax costs on intra-group cash repatriation or on external interest, dividends and royalties.
- Develop tax efficient management incentives to align interests and minimise costs for turnaround.
Implementation Support
When to Reach Out
Why Teneo
Our core team of experienced restructuring tax professionals advise on transaction types across all industries and geographies. We offer a tailored package to support your specific business requirements.
When to Reach Out
We provide tax support at any point within a business cycle or restructuring process, but we recommend reaching out to us as soon as a restructuring opportunity is identified.
