Why more UK business owners are exploring “cash-out” deals
“Cash-out” transactions - where business owners realise some value from their company without a full exit - are becoming increasingly common across the UK mid-market. When you assess the current state of play, it’s not hard to see why this is a fairly regular strategy.
In today’s climate, running a business is more demanding than ever. Economic uncertainty, shifting tax policies, and ongoing market volatility have led many business founders to consider de-risking. Extracting cash from a business via a partial exit can provide financial security while still maintaining ownership and future growth potential.
More than just valuation: The importance of deal structure
It’s tempting to focus solely on valuation during a transaction, but that’s only part of the picture. The structure of the deal - including the type of capital used and the terms agreed - can significantly impact the outcome.
Choosing the right capital source
The nature of the capital being brought in matters. Whether it's private equity, debt finance, or a strategic investor, each has implications for:
- Cash flow: Debt may introduce repayment obligations; equity may delay returns but dilute ownership.
- Control and governance: Some investors will seek board representation or decision-making power.
- Exit expectations: Timelines, return expectations, and exit strategy must be aligned between founder and investor.
Getting the structure right ensures your position is protected, your team is incentivised, and your future upside is preserved.
Don’t overlook the tax implications
A critical - and sometimes underestimated - aspect of “money out” transactions is tax.
Whether you're receiving proceeds through a share sale, dividend, or restructured equity, the tax treatment can vary dramatically. HMRC’s evolving stance on “phoenixing,” Business Asset Disposal Relief (BADR), and anti-avoidance rules all play a role.
Effective planning can make a substantial difference in the net proceeds you retain. Missteps can be costly. That’s why tax strategy should never be an afterthought - it should be integrated into the transaction planning from the outset.
Strategic support for founders and owner-managers
At Azets, we support owner-managers across the UK in navigating these decisions with clarity and confidence. We provide end-to-end advice to help you:
- Understand your business’ real market value
- Explore the right type of capital partner for your goals
- Structure deals that preserve your interests and incentivise your team
- Navigate the tax and legal implications of taking capital out of your business
- Plan for succession, long-term growth, or partial exit
Our goal is to help you achieve liquidity - without losing control.
Whether you're considering de-risking, planning succession, or pursuing investment-led growth, early advice is key. Understanding your options in advance puts you in a stronger position and helps you avoid costly mistakes down the line.
If you're starting to think about your next move, reach out to our specialist Corporate Finance team via the form below.
