Selling a business before you move: sequence, tax and the money afterwards

For most people who relocate with capital, selling a business is the largest single financial event of the process. Whether it happens before or after residence changes decides a great deal of what is left afterwards.

The sequencing question

• Selling while still resident means the gain is taxed under the old country's rules, at its rate, with whatever reliefs are available for a business owner — and those reliefs are frequently substantial and lost on emigration.
• Selling after residence changes may fall outside the old country's charge, subject to exit tax rules, trailing residence provisions and anti-avoidance rules that specifically address this sequence.
• The old country's exit tax, where one exists, may deem a disposal on departure anyway, which removes the choice.

Which is better is genuinely not obvious and depends on entrepreneurs' reliefs, the exit charge, the new country's treatment, and the treaty between them. It is the question to take to an adviser first, before a buyer is approached.

The transaction itself

• Share sale against asset sale, which produces different tax outcomes for buyer and seller and is negotiated rather than assumed.
• Earn-outs and deferred consideration, which are received after you have moved and may be taxed in the country you were resident in when earned rather than when paid. This catches people.
• Warranties and indemnities that survive for years, exposing you to claims from a distance.
• Escrow holding part of the price, released after the move.

What to do with the proceeds

• Bank it before you move, into an account you will keep. Opening an account for a large inbound sum as a new arrival with no history is the hard version of the problem.
• Document everything. The sale agreement, the completion statement, the tax paid. This is the source of wealth pack for the next decade of banking and applications.
• Do not rush the deployment. A large sum and a new country produce pressure to act; the cost of holding cash for six months while you learn the market is small against the cost of a bad purchase in it.
• Deal with the currency deliberately rather than by default. Converting the entire proceeds on the day of receipt is a decision even when it feels like an absence of one.