I'm buying a business — do I acquire the shares or just the assets, and does it matter for tax?

In a share deal, you're buying the legal entity itself, with its full history attached — any prior tax liability, an old return with an error, or an open dispute with the FTA becomes your problem after closing. Carried-forward tax losses generally remain available with no time limit in principle, but if ownership changes beyond a certain threshold and the business doesn't substantially continue the same activity, the authority can restrict use of those losses. In an asset deal, you buy only what's named in the agreement — equipment, contracts, customer relationships — leaving the target's prior liabilities with the seller, though the seller may face capital gains tax on the disposal unless specific reliefs apply.

The law provides Business Restructuring Relief for qualifying mergers and demergers carried out at tax-neutral net book value, subject to a two-year clawback period — if the shares are then sold to a third party within that window, the relief can be reversed. Any acquisition also needs to account for the fact that the corporate tax General Anti-Abuse Rule applies retroactively from 25 October 2022, meaning older arrangements without genuine commercial substance can still be reopened for review today. RASEEKH reviews a target company's tax file before signing, not after.