When a founder decided to exit, Pennyhills provided invaluable expertise. Their company valuation was precise, and their strategic tax advice ensured a smooth and incredibly tax-efficient buyout for all involved. They truly understood our needs and delivered outstanding results.
Case Study
Company valuation
Lika Family Fostering Ltd
Industry: Fostering Agency, Social Care
Location: South London
Est. 2013
Team Size: <10
Company Valuation & Tax-Efficient Shareholder Buyout Advisory
The Challenge
Lika Family Fostering, established in 2013 , is a reputable fostering agency based in London , with its head office in Stratford. Over the years, they have built a growing team of social workers and support staff dedicated to providing high-quality fostering services. A significant challenge arose when one of the founding directors decided to sell their stake in the business. The two remaining shareholders sought to acquire this stake, but it was crucial to execute the transaction in the most tax-efficient manner possible for all parties involved, while also establishing a fair and accurate valuation of the company. They needed expert guidance to navigate the complexities of company valuation and the tax implications of a shareholder buyout.
Pennyhills’ Solution
Pennyhills partnered with the directors of Lika Family Fostering to provide a comprehensive solution encompassing company valuation and strategic tax advisory for the shareholder buyout. Our approach involved:
Independent Company Valuation
We conducted a thorough and independent valuation of Lika Family Fostering. This involved a detailed analysis of their financial performance, asset base, future projections, market conditions within the fostering sector, and relevant industry benchmarks. Our objective was to establish a fair market value for the shares, providing a robust basis for the transaction.
Strategic Tax Planning for Buyout
We advised on the most tax-efficient structure for the share transfer, minimising Capital Gains Tax through available reliefs and guiding the remaining shareholders on efficient funding options.
Documentation Support
We advised on the necessary financial documentation required to support the chosen transaction structure, ensuring compliance with HMRC regulations.
Minimising Future Liabilities
Our advice focused not just on the immediate transaction but also on ensuring the long-term tax efficiency for the continuing shareholders and the company.
Key Results & Impact
By leveraging Pennyhills’ expertise in company valuation and tax-efficient corporate transactions, the directors of Lika Family Fostering were able to execute the founder’s exit seamlessly. Pennyhills provided a fair and defensible company valuation, which formed the basis of the transaction. Crucially, our strategic tax advice ensured the share transfer was completed in the most tax-efficient manner possible for all parties. This resulted in significant tax savings, allowing the remaining shareholders to acquire the stake under favourable conditions and the exiting director to realise their investment optimally, all while preserving the financial health and continuity of Lika Family Fostering.
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