Asset Purchase Vs Share Purchase: Which is best for you when buying a business?

• Posted onMarch 3, 2026

When buying a business, how the transaction is structured is of paramount importance and should be agreed at the earliest possible stage. In most cases, there are two main options available: an asset purchase or a share purchase. Each has different tax and legal consequences, and what is best for the buyer may not be best for the seller. (Originally published April 2024, updated March 2026).

What Are the Two Main Ways to Buy a Business?

When acquiring a business, buyers will usually choose between:

• An asset purchase, or
• A share purchase

The key difference lies in what is being bought and who the seller is.

What Is an Asset Purchase?

In an asset purchase, you buy the assets of the target company from the company itself. The company is therefore the seller.

Tax Position for an Asset Purchase

Key tax considerations include:

• No stamp duty is payable on the purchase of assets
• Stamp Duty Land Tax (SDLT) may be payable if property is included
• The SDLT amount depends on the property value, with a top rate of up to 5%

For example, buying an office or factory building for £500,000 as part of an asset sale would result in an SDLT charge of £14,500.

Advantages of an Asset Purchase

From a buyer’s perspective:

• The buyer does not inherit any tax liabilities of the company
• This can simplify the acquisition process

Potential Disadvantages

One downside is that:

• Any tax losses within the company that could have been set off against future profits are lost and are not available to the buyer.

What Is a Share Purchase?

In a share purchase, you buy the shares in the company from its shareholders. The shareholders are the sellers, not the company itself.

The company continues to own all of its assets and liabilities, but ownership of the company changes hands.

Stamp Duty and Tax in a Share Purchase

Stamp duty is payable on the purchase of shares at a rate of 0.5% of the purchase price.

For example:

• Buying shares for £500,000 would give rise to stamp duty of £2,500

All tax liabilities of the target company remain with the company. In effect, the buyer inherits those liabilities.

Why Share Purchases Can Be More Complex

Because tax liabilities stay with the company, a share purchase often requires:

• Detailed tax due diligence
• Protection through warranties and indemnities

This is to guard against liabilities being greater than expected after completion.

Asset Purchase vs Share Purchase: Buyer and Seller Perspectives

What works best for a buyer may not suit the seller.

• Buyers may prefer asset purchases for simplicity and reduced liability
• Sellers may prefer share purchases for different tax or commercial reasons

The structure of the deal should therefore be considered carefully by both parties at an early stage.

Which Option Is Best for You?

There is no one‑size‑fits‑all answer. The right structure depends on:

• Tax implications
• Risk exposure
• Commercial objectives
• Whether you are buying or selling

Professional advice is essential before deciding how a business acquisition should be structured.

Getting Expert Advice on Business Acquisitions

For expert advice on acquiring a business, you can contact WSP Solicitors’ local offices, servicing the whole of Gloucestershire, including; Gloucester, Stroud, Cheltenham, Tewkesbury or the Forest of Dean, or use the enquiry form on this page to request a callback.