Tackling the tax side of a business sale can be complex and there’s no universal answer. What tax is ultimately payable will depend on how the deal is arranged and the profit made so it is vital to get a clear picture of the business owner’s tax responsibilities.

Selling a business is not always as straightforward as receiving a lump sum on completion day. In many cases, buyers look to limit their financial exposure or keep the outgoing owner involved for a time, and that is where alternative forms of payment, or ‘consideration’, come into play.

It's common for buyers to propose a phased payment plan, particularly if they’d like you to remain involved during the transition. If taking the route of gradual payments with continued involvement, the seller might receive an initial sum upfront, with the balance paid over a set period, sometimes linked to performance milestones.