Buyers pay for clean, believable, transferable profit. Improvements you make now — documented associate arrangements, a cost base without personal spending threaded through it, income less dependent on you personally — need time to show up in the accounts a buyer will actually weigh. Start two to three years out and every pound of genuine profit improvement multiplies into several pounds of price. Start three months out and you're selling the practice as it is, take it or leave it.
Business Asset Disposal Relief reduces capital gains tax to 18% on qualifying gains up to the £1 million lifetime limit — against a main CGT rate of 24%, that's worth up to £60,000 per owner. The qualifying conditions (shareholding, officer status, trading status, the two-year clock) have traps, and they're cheap to fix years out and sometimes impossible to fix in a deal. We confirm eligibility at the start of every exit plan, for every shareholder — spouses included, where genuine.
If you trade as a company, you'll usually want to sell shares (one capital gain, BADR potentially available); buyers often prefer to buy assets (cleaner risk, better tax treatment for them). The gap between the two outcomes for you can run to six figures, which makes it a pricing point, not a technicality: an asset deal should cost the buyer more. Model both after-tax outcomes before heads of terms are signed.
Groups are professional acquirers with standard playbooks: part of the price deferred or contingent on performance, the seller tied in clinically for several years, targets that determine the earn-out. None of that is inherently bad — but the detail decides whether the headline price is real. What exactly triggers the deferred payments? What can you still control once you're an employee-ish clinician in your old practice? How is each element taxed, and when? Have someone equally fluent on your side of the table.
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Two to three years, ideally. That's long enough for profit improvements to show in the accounts a buyer relies on, for tax reliefs to be secured, and for the practice to become demonstrably less dependent on you personally — the three things that most move the price.
BADR reduces CGT to 18% on qualifying gains up to a £1 million lifetime limit — worth up to £60,000 per owner against the 24% main rate. Conditions around shareholding, officer status and the two-year qualifying period contain traps, so confirm eligibility early, while anything wrong is still fixable.
Often it's unavoidable — corporates routinely defer part of the price against performance with the seller tied in clinically. The question is whether the targets are achievable and within your control, and how each payment is taxed. Stress-test the structure before agreeing heads of terms, not after.
A free, no-obligation conversation about your situation — associate, principal, buying or selling. If we can't add value, we'll say so.
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