Secondary liabilities can present a significant concealed tax risk for a purchaser when acquiring a UK corporate target. Due to the wide reach of the provisions, a diligence review of target entities alone will often not identify all the potential tax risks. Relevant provisions should be considered at the outset of any transaction process in light of the target’s corporate legal structure and all relevant publicly available information. Steps may then be taken to mitigate any tax risks in a manner consistent with the commercial parameters of the deal.
