The Bedrock team were contacted by a partner from a three partner practice of accountants based in the North of England. The partner called us as she was very busy with a large workload and had an unexpected and urgent piece of work to perform regarding the potential sale of a client’s engineering business. The partner in the accountancy firm was confident that she was aware of most of the tax issues but wanted some assistance in a few areas of uncertainty. Because she did not have time to research the areas herself and as the main tax specialist within the practice there was no-one else suitable in-house to undertake the work. She identified that she needed a respected second opinion prior to advising her client.
How did Bedrock help?
Working to an extremely tight timetable the Bedrock team were able to advise on complex technical issues relating to the deal. Our team reviewed a draft tax clearance application and the documentation in connection with the proposed sale of the engineering business for both cash and loan notes.
Our involvement highlighted that the sale and purchase agreement was quite unusual and we spotted a hidden clause that meant that the original evaluation, made by the partner in the accountancy firm, was flawed. We made suggestions to the accountancy firm over and above what we had been originally engaged to perform. This allowed the accountancy practice to proactively present a case to change the purchase consideration saving her client capital gains tax without the shareholders even being aware that our team had offered advice.
Business Impact and Benefits
As a result of being able to respond quickly to an urgent request for help, the Bedrock team have built a strong long-term relationship with the accountancy firm. The immediate outcome on receipt of our advice was for the partner in the accountancy firm to insist that the deal be postponed and restructured to take account of our suggestions and recommendations to benefit their end client. We worked behind the scenes to enable the partner to deliver the best possible tax advice to their client.
Our recommendations whilst not having an immediately quantifiable benefit provided the shareholders of the engineering company potential future Capital Gains Tax savings. We also helped the firm of accountants to retain their client for the long term by showing they had considered all the implications of the proposed deal.
Contact our team today if you would like assistance in providing tax advice to your clients.