If a person wishes to sell their shares in - and withdraw from - a company, the most convenient way to do so may be to sell to the existing management team.

If a management buyout is intended to result in an employee-controlled company, those buying the shares from the existing shareholders may need to borrow to finance the acquisition. Borrowing can be made more attractive if it is done in a tax efficient way. Income Tax Act 2007 provides for relief to be given to an individual who pays interest on certain loans, including a loan to acquire shares in an employee-controlled company. For these purposes, 'employee' includes a director.

Although it may be of advantage to all parties to assist the management team, there would be a conflict of interest to act for all parties during the sale. The buyers should therefore obtain separate representation in the sale negotiations. There would be no objection, however, to the seller's accountant continuing to act for the company and its new owners after the sale is completed.

Various conditions have to be met for the relief to be given, although even if they are met, no relief can be claimed if the company's business consists solely of the occupation of commercial woodlands.