Many owner managers will be asking themselves - is now a good time to sell? There are some positive signals – private equity investors are selling, sale price multiples are strong and there is increased economic confidence. Yet further away on the horizon is the general election in May 2015, which brings uncertainties.

The capital gains tax (CGT) remains relatively benign for owner managers with entrepreneurs’ relief (ER) allowing them to obtain a 10% CGT rate on their first £10m of eligible gains. This means that ER is capable of producing tax savings of up to £1.8m (ie, £10m x 18% (ie, 10% ER CGT rate less 28% main CGT rate).

The sales of owner-managed companies frequently contain different elements of sale consideration, such as loan notes and earn-out arrangements. In such cases, special care is required to ensure the full benefit from ER is obtained, since the relevant rules are not straightforward and therefore steps must be taken to ensure the full benefit of the ER is realised.