7248_PG_Lore_Summer_2015 FINAL WEB PAGES

Real estate can be bought or sold as a standalone asset or through the acquisition or disposal of shares in a Special Purpose Vehicle (“an SPV”) that owns the property. So what are the implications of each route for the buyer and the seller? The table principally concentrates on non- tax differences between an asset sale and the sale of an SPV and there a number of tax and SDLT issues which will need to be considered. Corporate ASSET SALES SPV SALES PRINCIPAL TRANSACTION DOCUMENTS The agreed form of assignment, conveyance or transfer. A Share Purchase Agreement (“SPA”), usually drafted by the Buyer’s solicitor and therefore weighted towards the Buyer’s position. The complexity will depend on the assets and liabilities of the SPV. Tax is dealt with in additional covenants or a separate tax deed and additional tax warranties may be sought by the Buyer. SELLER The owner of the property. A legal opinion from local counsel is necessary if either party is a non-UK company. The owner/s of the shares in the SPV. If there are multiple shareholders, it can give rise to issues such as the allocation of liability and indemnities. Possible additional parties: • A parent company guarantor • Any third party who is giving warranties A legal opinion from local counsel is necessary if either party is a non-UK company. PRICE Fixed price plus apportionments on completion for rental income, service charge and arrears. Fixed price, or price adjusted according to all net assets and liabilities on the completion balance sheet, including any accrued but undistributed rent. 4 pg lore summer 2015

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