Peter Rayney looks at some of the practical tax issues concerning loan notes.â¯
Many company sales involve part of the consideration being satisfied in the form of loan notes issued by the purchaser.
The sale of owner-managed companies often involves part of the sale consideration being satisfied in the form of loan notes issued by the purchaser. In effect, the owner manager is agreeing to finance the deferral of part of their sale proceeds.
Many sellers could be forgiven for thinking that they would automatically be entitled to business asset disposal relief (BADR) on their ‘loan note’ consideration in the same way as the immediate cash proceeds. However, as this article demonstrates, this is not a simple matter.
QCB loan notes
Most straightforward ‘vanilla’ loan notes issued to individual
