I WAS asked recently to advise the owners of a company on an offer they had received for their business.

I asked for copies of their most recent accounts, checked some details on the Companies House website and did a little more research on line before going to see them.

I feared I would have to give them some bad news.

What I had discovered was that two of the shareholders had recently resigned as directors. That could have resulted in them paying capital gains tax at 28% rather than the 10% they were expecting.

As we talked through the issues it became apparent that they had received virtually no advice from their accountants.

We spent the next hour talking through some of the many things they would need to consider.

We discussed the difference between selling the assets of the business and selling the shares.

We discussed the different ways in which the deal could be structured, including payment in cash, payment in loan stock, an exchange of shares, deferred payment, earn outs and the different practical and tax consequences each brought with it.

We talked about ways in which the business could be restructured before sale to make the deal more tax efficient. We talked about the warranties and indemnities they would be expected to give.

We looked at the deal from the point of view of a potential purchaser and discussed tax incentives that could help make it more attractive.

We talked about how the shareholders could minimise their own tax liabilities.

By the end of the discussion they had a far better grasp of the various issues and the significant difference we could make to the tax bill by structuring what was an apparently simple transaction – the sale of the business – in different ways.

They had received a “take it or leave it” offer and had been on the point of taking it but now felt able to make a far more favourable counter-proposal.

I caught the train back to Taunton feeling that I’d had a constructive and enjoyable morning and 24 hours later they called to say they were changing tax advisers if I’d be prepared to take them on.

We quickly found a way around the capital gains tax issue I’d been concerned about.

Having had no advice until we met, they agreed on one thing: It was good to talk.

*Paul Aplin OBE is a tax partner with A C Mole & Sons and chairman of the Technical Committee of the Institute of Chartered Accountants in England & Wales Tax Faculty; you can follow him on Twitter @PaulAplinOnTax He and fellow tax partners Amanda Gunter and Paul Kingdom can be contacted on 01823-624450.