The Capital Gain
How much the owner takes home, and how the disposal structure changes the number
The thesis
The whole series prices the company, and no document answered how much the owner takes home. The difference between equally defensible structures reaches 39 million on a disposal of 156
What the study establishes
1
Capitalising retained earnings is the highest-return, lowest-cost step available, and it is a shareholders' meeting decision
2
The structure's indifference point is a 33.8% probability of a tax assessment
3
The decision to structure must be taken two years ahead; a holding company set up on the eve of a sale is a conduit company
Contents
- The tax rates
- The acquisition cost
- The structures
- The holding company
- The asset deal
- The earnout and the taxable event
- The risk
- The mandate