What is an asset sale in a UK small business?

An asset sale is where the buyer does not buy the legal entity that owns the business. Instead, they buy selected assets from the seller.

For a small business, this may include:

• Goodwill
• Trading name
• Customer list
• Website and domain name
• Social media accounts
• Phone numbers
• Fixtures and fittings
• Equipment
• Stock
• Intellectual property
• Leasehold interest
• Supplier introductions
• Records needed for handover
• Work-in-progress
• Business systems and software access

In a typical asset sale vs share sale small business deal, the asset sale is the more common buyer-friendly structure. A buyer might want the salon chairs, lease, brand name and client database, but not the old company, unpaid tax, old supplier disputes or historic loan agreements.

For example, if someone is buying a small business in the UK, such as a café in Reading, they may buy:

• The café name
• Coffee machines
• Tables and chairs
• Kitchen equipment
• Stock at valuation
• The lease, subject to landlord consent
• Website, menu, reviews and social accounts
• Goodwill is attached to the trading location

They are not automatically buying the seller’s limited company unless the deal is structured as a share sale.

If the business is a café, our guide on How to Value a Café Business in the UK explains the valuation factors buyers usually review, including profit, lease terms, equipment, location and owner involvement.

What is a share sale in a UK small business?

A share sale is where the buyer purchases the shares in a limited company.

The company stays the same. Only the ownership changes.

That means the company normally keeps:

• Its assets
• Its contracts
• Its employees
• Its bank history
• Its VAT registration
• Its PAYE records
• Its lease
• Its licences
• Its supplier accounts
• Its debts and liabilities
• Its tax history
• Its trading record

A limited company is legally separate from the people who own it, and owners usually have limited liability up to the value of their financial investment. (GOV.UK) This is why shares can be sold. The shares represent ownership of the company.

A share purchase agreement UK deal often works well where continuity matters. For example, a care business, regulated business, franchise, professional services company or larger café group may rely on contracts, licences or supplier arrangements that would be difficult to transfer individually.

The key difference between limited companies and sole traders

This is where many small business owners get confused.

A limited company is a separate legal entity. It can own assets, employ staff, hold leases, enter contracts and be sold by selling shares. (GOV.UK)

A sole trader is not separate from the owner. GOV.UK says a sole trader has unlimited liability, meaning the owner is personally responsible for the debts of the business. (GOV.UK)

So:

If you are selling a café business in the UK as a sole trader, the likely deal structure is an asset sale. If your café trades through a limited company, you may have the choice between an asset sale and a share sale.

Asset sale vs share sale UK: simple comparison table

Why are asset sales common when selling a small business in the UK

In the SME market, asset sale vs share sale UK discussions often start with the buyer’s risk.

Most buyers of independent businesses want a clean purchase. They may be using savings, family funds, bank lending or seller finance. They do not want to buy a company and later discover unpaid VAT, employee claims, supplier disputes, hidden debts or errors in historic accounts.

That is why an asset purchase agreement UK deal often appeals to buyers.

The buyer can say:

“I want the name, goodwill, equipment, lease and stock, but I do not want the old company.”

That can make sense for:

• selling a hair salon
• selling a café
• selling a takeaway
• selling a retail shop
• selling a small service business
• selling an independent business with modest turnover
• selling a business where the buyer is starting fresh
• buying assets from a business with messy accounts

Asset sales can also help where the buyer wants to trade through their own limited company.

For sector-specific valuation advice, these guides explain what buyers usually look for in common small business sales, including goodwill, lease terms, equipment, stock, staffing, trading history and owner involvement:

• How to Value a Hair Salon Business in the UK
• How to Value a Café Business in the UK
• How to Value a Takeaway Business in the UK
• How to Value a Retail Shop in the UK

Why sellers may prefer a share sale

Sellers often prefer share sales because the money usually goes directly to the shareholders. This can mean a better tax outcome.

A share sale can also feel cleaner once the deal is completed. The seller sells the company and steps away, subject to warranties, indemnities and any agreed handover period.

A share sale may also protect business value where the company holds things that are hard to transfer.

Key advantages of share sales in SME transactions

1. Continuity of the business

In a share sale, the company continues trading. The business does not need to be rebuilt under a new legal owner.

That can help preserve:

• Customer contracts
• Supplier terms
• Staff arrangements
• Trading accounts
• Software licences
• Franchise agreements
• Insurance history
• VAT registration
• PAYE registration
• Operational processes

For the customer, little may appear to change. The shop sign stays. The team stays. The invoices may still come from the same company.

2. Easier transfer of leases and licences

With an asset sale, the lease usually needs to be assigned to the buyer. This often involves landlord consent and a licence to assign a lease in the UK.

With a share sale, the tenant company remains the tenant. The shares change hands, but the leaseholder may stay the same.

That can make a share sale attractive where premises are valuable. For example, if a café has a strong high-street pitch in Reading or a salon has favourable lease terms, avoiding a full lease assignment in the commercial property UK process can be appealing.

Important point: this does not mean landlord issues vanish. Some leases include change-of-control provisions. Buyers and sellers should check the lease early.

3. Preservation of brand, trading history and goodwill

A share sale can preserve the business story.

That can matter where goodwill is tied to:

• Long trading history
• Online reviews
• Local reputation
• Repeat customers
• Supplier trust
• Brand recognition
• Licences
• Local authority permissions
• Historic accounts used for funding

For an independent business for sale in the UK, this may support the valuation. Buyers are often paying for trust, trading proof and reduced start-up risk.

4. Potential tax efficiencies for sellers

A share sale may allow the seller to pay Capital Gains Tax on the gain made on selling their shares. If Business Asset Disposal Relief applies, the rate may be lower than standard CGT rates.

From 6 April 2026, qualifying Business Asset Disposal Relief gains are taxed at 18%. The rate was 14% for qualifying disposals between 6 April 2025 and 5 April 2026, and 10% before 6 April 2025. (GOV.UK)

That can be a big reason why sellers ask whether a share sale is possible.

If Business Asset Disposal Relief may apply, sellers should check the current rules carefully. GOV.UK explains the latest Business Asset Disposal Relief rates and eligibility criteria.

What is transferred in an asset sale?

In an asset sale, the parties agree on a list of assets.

This should be set out clearly in the Asset Purchase Agreement.

Common transferred items include:

An asset sale should also state what is not being transferred.

That may include:

• Cash
• Debtors
• Bank accounts
• Old debts
• Tax liabilities
• Historic claims
• Personal items
• Excluded vehicles
• Certain contracts
• Director loans
• Company records not needed by the buyer

What is transferred in a share sale?

In a share sale, the shares transfer to the buyer.

The company remains the same legal entity, so it keeps its assets and liabilities.

That means the buyer takes the company with:

• All assets
• All debts
• All tax history
• All employees
• All contracts
• All leases
• All disputes
• All accounting history
• All compliance issues
• All warranties given by the company to third parties
• All hidden problems unless protected by legal documents

This is why share sales need stronger legal work.

The buyer’s solicitor will often ask for:

• Accounts
• Management accounts
• VAT returns
• PAYE records
• Corporation Tax returns
• Bank statements
• Lease documents
• Supplier contracts
• Customer contracts
• Employee contracts
• Insurance records
• Licences
• Asset finance agreements
• Loan documents
• Litigation/dispute details
• Data protection records

Legal process for an asset sale

A typical asset sale may follow this process:

Step 1: Valuation and sale preparation

The seller obtains a small business valuation UK opinion. This should look at profits, rent, location, lease terms, stock, equipment, goodwill and local buyer demand.

Lansley Commercial provides valuation opinions for cafés, salons, takeaways, retail shops and other small businesses, using local market evidence across Reading, Berkshire and the wider Thames Valley. (Lansley Commercial)

For a broader understanding of how buyers assess value across different sectors, see our guide to Small Business Valuation UK: How Buyers Really Value Owner-Managed Businesses. ICAEW also provides useful professional guidance on Business and Share Valuation, including valuation basis, purpose and methodology.

Step 2: Marketing and buyer qualification

The business is marketed confidentially where needed. Buyers are asked about funds, experience and timescale.

This matters because small business sales can fall apart when a buyer has not arranged finance.

Step 3: Heads of terms

Heads of terms set out:

• Purchase price
• Deposit
• Assets included
• Stock treatment
• Lease position
• Completion date target
• Handover period
• Any training
• Any seller finance
• Any exclusions

Step 4: Due diligence

The buyer checks the business before committing fully.

For an asset sale, due diligence usually focuses on:

• Trading figures
• Lease terms
• Rent and service charge
• Equipment
• Stock
• Staff
• Supplier arrangements
• Licences
• Insurance
• Restrictions on trading
• Utility costs
• Local competition
• Condition of premises

Step 5: Landlord consent and licence to assign

If the premises are leasehold, the landlord will usually need to approve the buyer. The landlord may ask for accounts, references, a deposit, rent guarantee or an authorised guarantee agreement.

This is one of the most common delay points in commercial property in Reading and wider Berkshire business sales.

Step 6: Asset Purchase Agreement

The solicitor prepares the Asset Purchase Agreement.

This document should cover:

• Assets being sold
• Price allocation
• Stock valuation
• Completion mechanics
• Employee transfer position
• Warranties
• Apportionments
• Handover
• Restrictive covenants
• VAT/TOGC treatment
• Lease assignment
• What happens if completion is delayed

Step 7: Completion and handover

At completion:

• Money is paid
• Lease assignment completes
• Stock is counted
• Keys are handed over
• Logins transfer
• Staff are informed as agreed
• Supplier/customer handover begins
• Buyer starts trading

UK tax treatment: asset sale vs share sale

Tax can change the whole commercial feel of a deal.

The right structure depends on:

• Whether the seller is a sole trader or a limited company
• How the business assets are owned
• Whether Business Asset Disposal Relief applies
• Whether the company has debts
• Whether goodwill has a base cost
• Whether the buyer is buying personally or through a company
• How the seller extracts money from a company after an asset sale
• Whether VAT TOGC rules apply
• Whether there is property or a lease premium
• Whether the buyer can claim tax relief on assets

This section gives a plain-English overview. Sellers and buyers should take tax advice before signing heads of terms.

Tax on selling a business in the UK: asset sale by a limited company

If a limited company sells its business assets, the company receives the sale proceeds.

The company may pay Corporation Tax on profits or chargeable gains made on the asset sale. For 2026, Corporation Tax is 19% for companies with profits under £50,000, 25% for companies with profits over £250,000, and marginal relief applies between those limits. (GOV.UK)

The key point is this:

The seller personally does not automatically receive the money.

The money goes into the company first.

The owner may then need to extract the money by:

• Salary
• Dividend
• Liquidation
• Capital distribution
• Director loan repayment
• Pension contribution
• Another method advised by their accountant

This can create a second tax layer.

That is why an asset sale by a limited company can sometimes produce a worse net result for the seller than a share sale.

Tax on selling a business in the UK: share sale by shareholders

In a share sale, the shareholders sell their shares.

The proceeds usually go directly to them.

The seller may pay Capital Gains Tax on the gain. Higher and additional rate taxpayers pay 24% on gains from 6 April 2026, while basic rate taxpayers may pay 18% on gains within the basic rate band and 24% above it. (GOV.UK)

If the seller qualifies for business asset disposal relief in the UK, the CGT rate may be 18% from 6 April 2026. (GOV.UK)

BADR can apply to shares where the company is a trading company and the seller has been an employee or office holder for at least two years. For non-EMI shares, the seller must usually have at least 5% of the shares and voting rights for at least two years before sale, with further 5% economic entitlement tests. (GOV.UK)

That is the main reason sellers often push for share sales.

Why sellers often prefer share sales

From a seller’s point of view, a share sale may offer:

• Direct sale proceeds to the shareholders
• Potential CGT treatment
• Possible BADR
• Fewer steps to extract funds
• Transfer of the company as a whole
• Better continuity for buyers, which may support price
• Less disruption to contracts and trading history

It is not always better. Legal costs and due diligence can be higher. Buyers may also demand price reductions or indemnities because they are taking more risk.

But for the right business, the seller’s net position can be much stronger.

Why buyers often prefer asset sales

From a buyer’s point of view, an asset sale may offer:

• Control over which assets are acquired
• Ability to leave behind old company liabilities
• A fresh trading vehicle
• Lower risk of historic tax surprises
• Easier lender understanding in some small deals
• Ability to allocate price between goodwill, equipment and stock
• Possible tax relief on acquired assets

For goodwill, Corporation Tax relief is restricted. HMRC states that relief is at a fixed rate of 6.5% a year on the lower of the cost of the relevant asset or six times the cost of qualifying IP assets in the purchased business. (GOV.UK)

That means goodwill tax treatment can be helpful in some cases, but not every small business buyer will get meaningful relief.

VAT and TOGC in asset sales

Many asset sales are intended to be treated as a Transfer of a Going Concern, or TOGC.

HMRC guidance says that where TOGC conditions are met, no VAT is chargeable on the transfer. The assets must be capable of forming a separate business, and the buyer must use them to carry on the same kind of business as the seller. (GOV.UK)

This matters because VAT mistakes can damage cash flow.

If VAT is wrongly charged on a TOGC, HMRC says the buyer may not be able to reclaim it because there was no taxable supply. (GOV.UK)

For a café, salon or shop sale, VAT should be checked early.

This is why VAT should be checked before completion. HMRC’s guidance on Transferring a Business as a Going Concern explains when a business sale may be treated as outside the scope of VAT.

Hypothetical small business financial scenario: asset sale vs share sale tax

Hypothetical Scenario

Assume:

Dividend tax rates from 6 April 2026 are 10.75% basic rate, 35.75% higher rate and 39.35% additional rate. (GOV.UK)

Option 1: Share sale

The buyer purchases the shares in the hypothetical small business for £250,000.

The seller pays CGT with BADR at 18%.

For the seller, this is clean and direct.

The buyer now owns the company. They also inherit the company history, including any liabilities not found during due diligence.

Option 2: Asset sale, then dividend extraction

The buyer purchases selected assets from the hypothetical small business for £250,000.

The company pays Corporation Tax first.

The seller then extracts the £195,000 as a dividend.

Option 3: Asset sale, then liquidation/capital extraction with BADR

Sometimes the seller may wind up the company and extract funds as capital, if the conditions are met and advice supports this.

What the example shows

In this model, the share sale gives the seller around £79,713 more than an asset sale followed by dividend extraction.

It also gives around £45,100 more than an asset sale followed by capital extraction after Corporation Tax.

That is why the share sale tax vs asset sale tax UK can become a major deal issue.

For the buyer, the result is different. The asset sale may still be more attractive because it avoids historic liabilities and allows the buyer to choose the assets. The buyer may also get tax relief on some acquired assets, subject to the rules.

Buyer outcome in the hypothetical small business example

If the buyer chooses an asset sale

The buyer gets:

• Goodwill
• Equipment
• Fixtures and fittings
• Stock
• Lease, if assigned
• Trading name and customer-facing assets

The buyer may avoid:

• Historic Corporation Tax problems
• Old VAT issues
• Director loan issues
• Supplier debts
• Unknown legal claims
• Old bank debt

The buyer may also be able to claim relief on some plant and machinery, stock costs and possibly restricted goodwill relief.

But the buyer may need:

• Landlord consent
• New supplier accounts
• Contract assignments
• TUPE compliance
• New licences
• New banking
• New merchant services
• New insurance

If the buyer chooses a share sale

The buyer gets:

• The company
• Existing lease position
• Staff continuity
• Supplier accounts
• Customer contracts
• Licences held by the company
• Trading history
• Brand history

But the buyer also inherits:

• Tax history
• Staff history
• Debts
• Claims
• Contract problems
• Compliance issues
• Accounting errors
• Unknown liabilities

The buyer may pay 0.5% Stamp Duty on the share purchase. (GOV.UK)

This is why a buyer may agree to a share sale only if the price, warranties, indemnities and due diligence stack up.

TUPE in small business sales

TUPE can apply where a business changes ownership. GOV.UK says when TUPE applies, employees’ jobs usually transfer to the new company, their terms and conditions transfer, and continuity of employment is maintained. (GOV.UK)

This matters in TUPE small business sale UK deals.

In an asset sale

Employees may transfer to the buyer under TUPE if the business continues in a recognisable form.

For example, if a buyer purchases a hair salon and continues running it as a salon from the same premises, the staff may transfer.

In a share sale

Employees usually remain employed by the same company. The employer has not changed. The shareholders have changed.

That can make the handover smoother, but buyers still need to check:

• Employment contracts
• Holiday pay
• Sick pay
• Pensions
• Disciplinary issues
• Grievances
• Unpaid wages
• Redundancy exposure
• Informal arrangements

For a plain-English overview of employee transfer rules, GOV.UK explains how Business Transfers, Takeovers and TUPE can affect employees when a business changes hands.

Lease issues: one of the biggest SME deal blockers

For many small businesses, the lease is where the value sits.

A good lease can support the price. A poor lease can kill a deal.

Common lease issues include:

• Short term left
• High rent
• Upcoming rent review
• Repairing obligations
• Service charge disputes
• No assignment rights
• Landlord delay
• Personal guarantee demands
• Authorised guarantee agreement
• Change-of-use restrictions
• Break clauses
• Arrears
• Missing licence for previous alterations

For an asset sale, the buyer often needs a licence to assign the lease in the UK from the landlord. That can take time.

For a share sale, the company remains the tenant. But the lease may still require landlord consent if there is a change of control.

Tip: Check the lease before marketing the business. It is much better to find assignment restrictions early than after a buyer has paid for legal work.

Lease terms can directly affect value, funding and buyer confidence. For more details, see our guide to Lease Terms in Small Business Valuation UK.

Contracts, licences and supplier accounts

Asset sales and share sales differ significantly in contracts.

In an asset sale

Contracts may need to be:

• Assigned
• Novated
• Terminated and replaced
• Renegotiated
• Excluded

Some contracts cannot be transferred without consent.

This can matter for:

• Delivery platforms
• Franchise agreements
• Waste collection
• Utilities
• Commercial laundry
• EPOS systems
• Online ordering systems
• Event contracts
• Maintenance contracts
• Supplier credit terms

In a share sale

Contracts usually remain with the company.

But check for change-of-control clauses. Some contracts allow the other party to terminate if the company ownership changes.

Stock, fixtures and completion accounts

Small deals often fall through because the parties do not define stock and fixtures properly.

For an asset sale, stock is often:

• Included up to a set value
• Valued separately at completion
• Paid for at cost
• Excluded if old or unsaleable

For cafés and restaurants, stock can include food, drinks, alcohol, disposables and cleaning products.

For salons, stock can include retail hair products, colours, treatments and beauty consumables.

For retail shops, stock can be a major part of the deal.

Use a clear stock valuation method. Do not leave it to argument on completion day.

Funding implications for buyers

Lenders often look at the deal structure carefully.

For asset sales, lenders may prefer the cleaner risk profile. They can understand what the buyer is buying.

For share sales, lenders may ask for more due diligence because the company’s history matters.

Buyers should prepare:

• Deposit funds
• Proof of funds
• Funding agreement in principle
• Business plan
• Cash flow forecast
• Experience summary
• Lease references
• Personal guarantee position

Buyers and lenders often look closely at recent trading. Our guide to Recent Performance in Small Business Valuation UK explains why upward trends can support stronger offers.

Lansley Commercial also notes that business sales involve valuation, confidentiality, buyer vetting, legal due diligence and deal negotiation, rather than simply listing a business for sale. (Lansley Commercial)

When an asset sale is more appropriate

An asset sale may be better where:

• The buyer wants lower risk
• The seller is a sole trader
• The company has historic liabilities
• The accounts are messy
• The buyer only wants certain assets
• Contracts are not central to the value
• The lease can be assigned
• The buyer wants to trade through their own company
• The business is simple, such as a small café, salon or retail unit
• There are a few employees
• The buyer is asset-backed or a first-time buyer

This is why asset sale vs share sale small business deals often end up as asset purchases.

When a share sale may be worth pursuing

A share sale may be worth the extra work where:

• The company holds valuable contracts
• The lease is hard to assign
• Licences are difficult to transfer
• The brand has a strong trading history
• The company has clean accounts
• The seller qualifies for BADR
• The buyer wants continuity
• Staff retention is important
• The company has strong supplier terms
• The company’s trading record helps fund
• The buyer is experienced
• The business is worth enough to justify higher legal costs

A share sale can be a very good structure. It just needs more care.

Common pitfalls in asset sale vs share sale UK deals

Problems such as weak records, poor lease terms, owner dependency and unclear trading figures can slow a sale. See our guide on What Makes a Small Business Difficult to Sell for more examples.

Pitfall 1: Agreeing on a price before checking tax

A seller may agree on £250,000 and assume they will receive close to that amount.

The real net figure may be far lower after Corporation Tax, dividend tax, CGT, professional fees and debt repayment.

Get tax advice before agreeing to the heads of terms.

Pitfall 2: Ignoring the lease

The lease can decide whether the deal happens.

Check:

• Term left
• Assignment rights
• Landlord consent
• Rent review dates
• Repair obligations
• Use class
• Break rights
• Service charge
• Deposit
• Guarantees

Pitfall 3: Treating goodwill as simple

Goodwill is often the biggest number in a small business sale.

But goodwill depends on:

• Profit
• Location
• Repeat customers
• Reviews
• Owner dependence
• Staff stability
• Brand strength
• Lease security
• Transferability

If the owner is the business, goodwill may be weaker than expected.

Goodwill is closely linked to sustainable earnings. Our guide to Maintainable Profit in Small Business Valuation UK explains why buyers focus on the profit they believe can continue after completion.

If the business depends heavily on the owner, buyers may discount the price. Our guide to Owner Dependency in Small Business Valuation UK explains how sellers can reduce that risk before going to market.

Pitfall 4: Hidden liabilities in share sales

A share sale can look tidy until old issues appear.

Buyers should check:

• HMRC compliance
• PAYE
• VAT
• Corporation Tax
• Pensions
• Employee claims
• Lease breaches
• Supplier disputes
• Director loans
• Bounce Back Loans
• Personal expenses through the company

Pitfall 5: Poor deal sequencing

The order matters.

A sensible sequence is:

1. Valuation
2. Tax advice
3. Lease review
4. Buyer qualification
5. Heads of terms
6. Due diligence
7. Solicitor documents
8. Landlord consent
9. Funding approval
10. Stock count
11. Completion
12. Handover

Do not let the buyer spend weeks on due diligence if they have no funding.

How buyers and sellers can structure deals more effectively

For sellers

Before going to market:

• Speak to your accountant about asset sale vs share sale tax
• Check if BADR may apply
• Review your lease
• Prepare clean accounts
• Remove personal expenses from trading figures
• Prepare an asset list
• Check staff contracts
• Gather licences
• Prepare supplier information
• Decide what is included and excluded
• Understand your minimum net figure, not just headline price

Clean accounts can make due diligence easier and improve buyer confidence. See our guide to Small Business Valuation Accounts UK for practical improvements sellers can make before launching a sale.

Many deal problems can be reduced before the business goes to market. Our guide on What Makes a Small Business Easy to Sell UK explains the practical factors that help buyers move faster.

For buyers

Before making an offer:

• Decide whether you want assets or shares
• Check whether the lease can be transferred
• Ask for trading proof
• Review staff costs
• Check stock levels
• Inspect equipment
• Ask about liabilities
• Check licences
• Speak to finance providers early
• Budget for legal fees, rent deposit, stock and working capital
• Do not rely only on seller profit claims

For both parties

Use heads of terms that deal with:

• Deal structure
• Price
• Deposit
• Stock
• Lease
• Employees
• VAT/TOGC
• Handover
• Training
• Completion date
• Confidentiality
• Professional costs
• Exclusivity period
• What happens if the landlord’s consent is refused

Good heads of terms can save weeks.

Asset sale vs share sale UK: which is better?

There is no single answer.

For many small independent businesses, an asset sale is simpler and more buyer-friendly.

For clean limited companies with strong contracts, valuable leases, licences or tax advantages for the seller, a share sale may be worth serious discussion.

A practical rule:

• Choose an asset sale when the buyer wants selected assets and lower historical risk.
• Consider a share sale when continuity, contracts, licences, lease position and seller tax treatment justify the extra legal work.

For business owners thinking “how do I sell my business Berkshire?” or “who can help me sell a business Reading?”, the right first move is not choosing a legal document. It is understanding the value, the lease, the buyer market and the tax position before agreeing on terms.

FAQ: asset sale vs share sale UK

What is the difference between an asset sale and a share sale?

An asset sale transfers selected assets of the business. A share sale transfers ownership of the limited company by selling the shares.

Is an asset sale better for buyers?

Often, yes. Buyers usually prefer asset sales because they can choose the assets and avoid many historic company liabilities.

Is a share sale better for sellers?

Often, yes. Sellers may prefer share sales because sale proceeds usually go directly to shareholders and may qualify for Capital Gains Tax treatment.

Can a sole trader sell shares in their business?

No. A sole trader does not have company shares. They usually sell the business assets, goodwill, stock and trading setup.

Does TUPE apply to an asset sale?

It can. If the business continues in a recognisable form, employees may transfer to the buyer under TUPE.

Does a lease need landlord consent in an asset sale?

Usually, yes. A lease assignment normally needs landlord consent and a licence to assign.

Does a share sale avoid landlord consent?

Sometimes. The tenant company remains the same, so there may be no lease assignment. But the lease may contain change-of-control wording, so it must be checked.

What is an Asset Purchase Agreement?

An Asset Purchase Agreement is the legal contract used for an asset sale. It lists the assets being sold, the price, completion steps, warranties and other deal terms.

What is a Share Purchase Agreement?

A Share Purchase Agreement is the legal contract used for a share sale. It deals with shares, warranties, indemnities, disclosure, tax protection and completion terms.

Can goodwill be taxed differently in an asset sale?

Yes. The seller and buyer may have different tax treatment. Buyers may sometimes obtain tax relief on goodwill, but UK relief is restricted and should be checked with an accountant.

What is the main tax issue in an asset sale by a limited company?

The company may pay Corporation Tax first, then the owner may pay further tax when extracting the money from the company.

What is the main tax issue in a share sale?

The seller may pay Capital Gains Tax on the sale of shares. If BADR applies, the CGT rate may be lower than the standard rate.