The arithmetic
Business partner buyout calculator: the figures that decide the price
Updated
A partner buyout comes down to four numbers: the value of the share, who pays, the tax on the leaver and the duty on the transfer.
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1. The tax on the partner who leaves
- Business Asset Disposal Relief: 18% on qualifying gains disposed of from 6 April 2026, for a holding of at least 5% held for at least 2 years.
- Otherwise Capital Gains Tax at 18% and 24% for individuals from 6 April 2026, after the £3,000 annual exempt amount for 2026 to 2027.
Source: Partner buyout rules: every row, with its source
2. Who pays: the company or the remaining partner
- A company buyback is treated as capital, not income, only if the conditions hold: among them the seller has owned the shares for five years or more, the seller's interest falls to no more than 75% of what it was, and the seller is not connected (more than 30%) afterwards.
- A private company may buy back up to the lower of £15,000 or 5% of its share capital a year out of cash if its articles allow.
- The company must deliver a return to Companies House within 28 days.
Source: Partner buyout rules: every row, with its source
3. Duty on a share purchase
If the remaining partner buys the shares directly, the duty on the stock transfer form is paid within 30 days of it being signed and dated.
Source: Partner buyout rules: every row, with its source
4. A partnership with no deed
Under section 42 of the Partnership Act 1890, absent any other agreement, an outgoing partner's estate is entitled to a share of profits or to 5% interest on their share of the partnership assets.
Source: Partner buyout rules: every row, with its source
The advisers' fees on top
Three providers publish a fee: £100 (Sprintlaw, a share buy-out agreement), £750 (Jonathan Lea Network, an initial advice appointment) and £1,500 (Gannons, an initial review).
Source: Partner buyout adviser fees: every row, with its source