Are the rumours true? M&A Transactions are rising ahead of changes to CGT…

Speculation and anticipation are running high in the UK business community, but we’ve seen this story before haven’t we?! Among the most talked-about topics is the potential surge in mergers and acquisitions (M&A) activity, with reports suggesting that transactions could jump by an astonishing rate as people try to conclude transactions under the current tax regime. This prediction, highlighted in an article in the Times, says that the uncertainty is leading to a race to sell up before any rises to capital gains tax are announced and suggests M&A transactions could jump by a whopping 71%! However, this scenario is not unfamiliar to those in the M&A sector as we have seen similar patterns in the past.

The reality is, business leaders that were already in the process of buying or selling, only become motivated to do so quicker to avoid the potential financial impact of higher taxes on the proceeds from their sales, but the wheels are likely to have already been in motion (and frankly need to have been if the Budget deadline is to be beaten).

The increased urgency in the market can create a favourable environment for sellers, however, this also means that buyers need to be particularly vigilant and strategic in their approach. The rush to complete transactions can sometimes lead to hasty decisions or overlooked details, which could have long-term implications for all parties. Legal teams will want to ensure that due diligence is thorough and clients are adequately protected.

Business leaders should keep a close eye on developments and stay responsive. While there may be pressure to complete transactions quickly or ahead of schedule, due process should be followed and comprehensive tax, legal and employment advice is crucial. The next few weeks are likely to be pivotal for many businesses across the UK. Whether you're considering a sale, looking to acquire, or simply navigating the current landscape, being prepared and proactive will be essential.

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