asset-or-share

---
name: asset-or-share
description: Turns your own trading facts into a side by side written comparison of the two ways a business is sold, an asset sale and a share sale: who employs your staff the morning after each one, whether the sale can be outside the scope of VAT, which tax the buyer pays, which relief you may claim and on what conditions, what happens to the lease, the licence, the contracts and the debts, what you are still on the hook for after completion, and a numbered list of the questions only your accountant and your solicitor can answer. Use when you are one to three years from selling up or handing over and somebody has started using the words "asset sale" as though you already knew what they meant.
---

# The two ways your business can be sold, set out side by side against your own lease, your own staff and your own tax position, with the questions only your accountant can answer already written down

You give this the shape of your business: whether there is a limited company, who owns the premises, how many staff, the lease, the licence, the supplier contracts and any borrowing secured on the business. You get back one comparison with two columns, asset sale and share sale, and a source on every line: who your staff work for afterwards, whether VAT is chargeable, which tax the buyer pays, which relief you may be able to claim, what carries over, what stays behind, and what you remain responsible for the day after completion. It will not tell you which route to take. That turns on your own lifetime allowance history, your other income and your family intentions, none of which sits in any document you can hand it, so it writes those questions out and sends you to your accountant and your solicitor with them already drafted.

## What it does

1. **Establish what is actually capable of being sold, before comparing anything.** A share sale only exists where there is a company whose shares can change hands, so write down the legal owner first: sole trader, partnership, LLP or limited company, with the company number where there is one. Then write who holds the lease or the freehold title and whose name is on the premises licence, because these are often different from the trading entity and that mismatch surfaces in week four of a sale rather than week one. Note which equipment is owned outright and which is on hire purchase, because hired kit cannot be sold. For a sole trader the real comparison is not asset against share, it is asset sale against incorporating first, which starts a fresh two year clock. Every consequence below hangs off this answer, so it goes first.

2. **Read the public record a buyer will read about you, before you write a word to anybody.** Companies House gives anyone your registered address, "current and resigned officers", "document images", "mortgage charge data", "previous company names" and "insolvency information", free. It also lets a stranger "set up free email alerts to tell you when a company updates its details". Print what is there today, list every late filing and every charge still showing as outstanding, and note that none of it can be tidied up retrospectively. An unreleased charge from a loan repaid years ago will hold up completion, and it takes weeks to clear, which is why it belongs on the list now rather than in the diligence period.

3. **Settle the employer question first, because it decides whether TUPE bites at all.** An asset sale is caught by regulation 3(1)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006: "a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity". Regulation 4(1) then moves every contract across so it has effect "as if originally made between the person so employed and the transferee", and regulation 4(2)(a) carries over "all the transferor's rights, powers, duties and liabilities". Regulation 4(2)(b) is the one sellers miss: an act or omission of the transferor before completion "shall be deemed to have been an act or omission of or in relation to the transferee". In a share sale none of this happens, because the company remains the employer and nobody's employer changes. Write that in plain words in both columns, and add that no TUPE is not the same as no staff issue, because every employment liability stays inside the company the buyer is buying.

4. **Work out whether an asset sale could be outside the scope of VAT as a transfer of a going concern, and record that nobody gets to choose.** VAT Notice 700/9 paragraph 2.1 is blunt: "The TOGC rules are compulsory. You cannot choose to 'opt out'." Paragraph 1.4 sets the conditions, including that the assets are sold together, that "the buyer must intend to use the assets in carrying on the same kind of business as the seller", that where the seller is a taxable person the buyer must be or become one, and that "there must not be a series of immediately consecutive transfers of the business". Paragraph 1.5 disposes of the share side in one line: where "a limited company is passed from one person to another by the transfer of shares, but the assets still belong to the limited company", there is no change in the ownership of the assets and so no supply the rules could apply to. Record that a share sale is not a TOGC because it is not a supply of assets at all, which is a different answer from "it qualifies". Note section 10, which has force of law, on form VAT68 where the parties want to transfer the VAT registration number, and note that taking the number also takes the history.

5. **Set out which tax the buyer pays on each route, because the buyer's total cost decides what they can offer you.** On an asset sale including land or a lease premium, Stamp Duty Land Tax starts at "GBP 150,000 for non-residential land and properties", with bands of "Up to GBP 150,000 Zero", "The next GBP 100,000 (the portion from GBP 150,001 to GBP 250,000) 2%" and "The remaining amount (the portion above GBP 250,000) 5%". Where an existing lease is taken over, "If you buy an existing ('assigned') lease, you only pay SDLT on the lease price (or 'consideration')", and the buyer must "Send an SDLT return to HMRC and pay the tax within 14 days of completion". SDLT is England and Northern Ireland only: Scotland has Land and Buildings Transaction Tax, Wales has Land Transaction Tax, so record the country before quoting a band. On a share sale the buyer pays 0.5% instead, as Stamp Duty Reserve Tax electronically or Stamp Duty on a stock transfer form where the transaction is over GBP 1,000. Put both in the comparison as the buyer's cost, and expect a buyer who has just met a 5% slice to go looking for it in the price.

6. **Set out which relief you may be able to claim on each route, and the conditions that must already have been true for two years.** Business Asset Disposal Relief charges "18% on all gains on qualifying assets disposed of from 6 April 2026", which is the rate for a disposal made today, 23 September 2026, in the 2026 to 2027 tax year. It was 14% between 6 April 2025 and 5 April 2026 and 10% on or before 5 April 2025, so it has moved twice in two years and must be re-checked on the day of the disposal. The lifetime limit is GBP 1 million for disposals on or after 11 March 2020, and it is per individual, so a spouse who genuinely owns part of the business has their own. For a sole trader or partner the conditions are that "you're a sole trader or business partner" and "you've owned the business for at least 2 years". For shares the test is harder: employee or office holder, a trading company, and a "personal company", meaning "you have at least 5% of both the: shares; voting rights", all for two years. Record which conditions are met, which are not, and which have a clock on them, because a two year condition cannot be fixed the month before completion.

7. **Write down, line by line, what moves and what stays on each route.** In a share sale the company keeps what it already holds, so the lease, the licence, the supplier contracts, the card terminal agreement and the bank account all continue untouched. In an asset sale each one is dealt with separately: the lease needs the landlord's consent to assign, the premises licence needs a transfer application, and every supplier contract novates, is reassigned or ends. List them by name from the owner's own paperwork, with the counterparty, the notice period and whether the document names the trading entity or the individual. Mark each with whether change of control is a trigger, because a change of control clause turns a share sale into an asset sale problem after all. This page is the one a solicitor can act on directly, so it is worth the hour it takes.

8. **Write down what you are still responsible for after completion on each route.** On an asset sale you keep the historical tax of the selling entity, every personal guarantee you gave to a landlord, a brewery or an equipment funder, and any employment liability that did not transfer. On a share sale you have sold the company with every liability inside it, which is exactly why the buyer's solicitor will want warranties and an indemnity from you personally, and those can run for years after the money is paid. A lease assignment can also leave you guaranteeing the buyer's rent under an authorised guarantee agreement, which is covered in the companion lease skill and cross referenced here rather than repeated. Record the amount and the counterparty of every personal guarantee that exists today, with the document it sits in. An owner who has forgotten one is negotiating with an unknown number in the room.

9. **Hand the facts to Codex to build the files, and keep every judgement out of the hand-off.** Claude passes over the owner's answers from steps 1 to 8 exactly as given, with the regulation or page cited against every published rule, and nothing else: no view on the better route, no estimate of a figure the owner did not supply, no valuation. Run:

   ```
   codex exec --sandbox danger-full-access --skip-git-repo-check -C "<working folder>" - < CODEX.md
   ```

   Back comes the two column comparison with a source on every row, the TUPE and TOGC tests as separate files showing the facts each conclusion rests on, the buyer tax and seller relief tables, the carry over list, the still responsible list, the questions for the professionals and a gaps file. Codex decides nothing. Anything the owner did not supply becomes a numbered row in gaps.md and never a guess.

10. **Finish with the numbered questions for your accountant and your solicitor, and date the whole thing.** Split them. The accountant gets the lifetime limit history, the two year conditions, whether the 5% test is met, and what the after tax figure looks like on each route at the same headline price. The solicitor gets the lease consent position, the licence transfer, the change of control clauses, the personal guarantees and the warranties a share sale will expose you to. Each question names the document it arises from and the step it came from, so nobody re-reads the file to answer one line. Put the build date and the date each tax rate was read in the footer, because a relief rate has changed in each of the last two tax years and an undated file gets read next spring as though it were still true.

## Then it checks

1. Every row of the comparison has an entry in both the asset sale column and the share sale column, or states in that cell that the point does not arise on that route and why.
2. Every published rule quoted is followed by its source and the date that source page states, and no rule appears without one.
3. The file states, from the owner's own facts, whether there is a company whose shares could be sold at all, and where there is not it says so in the share sale column of every row rather than leaving it blank.
4. The relief section states the 18% rate, states that this is the rate for a disposal made in the 2026 to 2027 tax year, states the GBP 1 million lifetime limit and the date it applies from, and lists the two year conditions separately for a sole trader or partner and for shares in a personal company.
5. No figure anywhere in the file is a multiple, a price, an implied value or a range for the business, and no sentence tells the owner which route to take.
6. Every contract, lease, licence and guarantee named in the carry over list and the still responsible list names its counterparty and the document it was read from, and anything the owner could not produce appears as a numbered row in gaps.md.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- Never state an EBITDA multiple, a turnover multiple, a price per cover or any other benchmark for a single independent UK hospitality business. No published figure exists. The numbers in circulation come from business transfer agents and brokers paid a percentage of the sale, or from firms selling a valuation product, and that incentive runs one way. An owner who believes a high borrowed multiple turns down the one fair offer they get and returns to market a year later looking stale; an owner who believes a low one takes the first offer and never learns there were two other buyers. Either way the number did the deciding and it belonged to somebody else.
- Never recommend a route. The skill sets out both and names the facts each turns on.
- Never state the tax the owner will actually pay. It records the published rate, the published conditions and which of them the owner's facts satisfy. The calculation is the accountant's.
- Never treat a share sale as the one with no staff problem. The employer does not change, so there is no relevant transfer, and every employment liability stays inside the company being bought.
- Never quote a rate or a band out of this file without re-checking it on the day. The relief rate has been at three different levels in three tax years, which is why every figure carries the date it was read.
- This output is a working document prepared for the owner's own solicitor and accountant to check. It applies published rules to facts the owner supplied. It is not legal advice, it is not tax advice and it is not a valuation.

## Built from
- The Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246, regulation 3, https://www.legislation.gov.uk/uksi/2006/246/regulation/3, revised text stated to be up to date with all changes known to be in force on or before 21 September 2026, read 23 September 2026: the definition of a relevant transfer, in step 3.
- The Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246, regulation 4, https://www.legislation.gov.uk/uksi/2006/246/regulation/4, revised text stated to be up to date with all changes known to be in force on or before 23 September 2026, read 23 September 2026: automatic transfer of contracts and liabilities and the deeming of pre completion acts, in steps 3 and 8.
- HM Revenue and Customs, "Transfer a business as a going concern (VAT Notice 700/9)", https://www.gov.uk/guidance/transfer-a-business-as-a-going-concern-and-vat-notice-7009, published 6 December 2012, last updated 23 May 2025, read 23 September 2026: paragraph 1.4 conditions, paragraph 1.5 on share transfers, paragraph 2.1 on the rules being compulsory and section 10 on form VAT68, in step 4.
- HM Revenue and Customs and GOV.UK, "Business Asset Disposal Relief", https://www.gov.uk/business-asset-disposal-relief, no publication or updated date shown on the page, read 23 September 2026: the 18% rate from 6 April 2026, the sole trader and partner conditions and the personal company 5% test, in step 6.
- HM Revenue and Customs, "HS275 Business Asset Disposal Relief (2026)", https://www.gov.uk/government/publications/entrepreneurs-relief-hs275-self-assessment-helpsheet/hs275-business-asset-disposal-relief-2026, page dated 6 April 2026, read 23 September 2026: the GBP 1 million lifetime limit from 11 March 2020, the two year qualifying period and the written claim deadline, in step 6.
- HM Revenue and Customs and GOV.UK, "Stamp Duty Land Tax", https://www.gov.uk/stamp-duty-land-tax and the whole guide at https://www.gov.uk/stamp-duty-land-tax/print, no publication or updated date shown on the page, read 23 September 2026: the GBP 150,000 threshold, the 2% and 5% bands, the assigned lease rule, the 14 day deadline and the England and Northern Ireland scope, in step 5.
- HM Revenue and Customs and GOV.UK, "Tax when you buy shares", https://www.gov.uk/tax-buy-shares, no publication or updated date shown on the page, read 23 September 2026: the 0.5% duty and the GBP 1,000 stock transfer form threshold, in step 5.
- Companies Act 2006, sections 386 and 388, https://www.legislation.gov.uk/ukpga/2006/46/section/386 and https://www.legislation.gov.uk/ukpga/2006/46/section/388, both pages stated to be up to date with all changes known to be in force on or before 22 September 2026, read 23 September 2026: the adequate accounting records duty and the three year preservation period for a private company, in step 2.
- Companies House and GOV.UK, "Get information about a company", https://www.gov.uk/get-information-about-a-company, no publication or updated date shown on the page, read 23 September 2026: what a buyer can read for free and the free change alerts, in step 2.

# asset-or-share

## You are given
The owner's own facts from steps 1 to 8: the legal form of the business and whether shares exist to sell; who holds the lease, the licence and the equipment; the Companies House record read today; the intended route, asset sale or share sale; the owner's assessment of each VAT Notice 700/9 TOGC condition; the sale price, whether land or a lease premium is included, and the country; whether the sole trader or partner test and the personal company 5% test are met; every lease, licence, contract and guarantee named with counterparty, notice period, and whether change of control is a trigger. Every judgement, including route and which condition is met, is already made by the owner and supplied as fact.

## Produce
Write into `./asset-or-share-output/`:
1. `sale-structure-comparison.csv`, columns `topic`, `step_ref`, `asset_sale_position`, `share_sale_position`, `source_citation`. One row per topic: legal owner today, public record summary, employer after completion, VAT treatment, buyer tax, seller relief, what carries over, what stays behind, continuing liability. A cell not arising on a route states so and why, never blank.
2. `tupe-test.md`: whether a relevant transfer under regulation 3(1)(a) arises on the intended route, the facts it rests on, and the regulation 4 consequence.
3. `togc-test.md`: each VAT Notice 700/9 paragraph 1.4 condition as met, not met or not stated, the overall conclusion, and the paragraph 1.5 share sale statement.
4. `buyer-tax-table.csv`, columns `route`, `tax_type`, `rate_or_band`, `basis_from_owner_facts`, `source_citation`.
5. `seller-relief-table.csv`, columns `route`, `relief`, `rate`, `lifetime_limit_gbp`, `condition`, `met`, `source_citation`.
6. `carry-over-list.csv`, columns `item_ref`, `item_name_verbatim`, `counterparty`, `route`, `treatment`, `change_of_control_trigger`.
7. `still-responsible-list.csv`, columns `item_ref`, `item_name_verbatim`, `route`, `amount_or_scope`, `counterparty`.
8. `professional-questions.md`: numbered, split accountant and solicitor, each naming its document and step.
9. `gaps.md`: every fact steps 1 to 8 did not supply.

## Rules
Codex transcribes, compares and sorts only. It never recommends a route, never estimates a value, a multiple or a price, and never states the tax the owner will actually pay. A missing fact is a row in `gaps.md`, never a guess. British English, GBP as `GBP`, DD Month YYYY dates, no em dashes; supplied text with one is recorded verbatim and flagged. Every file ends with this line: a working document prepared for the owner's own solicitor and accountant to check. It applies published rules to facts the owner supplied. It is not legal advice, it is not tax advice and it is not a valuation.

## Return
The path of every file written, the row count of each CSV, the TUPE and TOGC conclusions in full, whether the two year Business Asset Disposal Relief condition is met, the count of `change_of_control_trigger` rows, and the `gaps.md` item count.