Buying or selling an agency

We will not give you a multiple, and you should ask anyone who does where it comes from. We checked the obvious places: HMRC's Capital Gains Manual goodwill pages and the Shares and Assets Valuation Manual publish no multiple of turnover, profit, EBITDA or managed-property income for estate or letting agency businesses, and no industry multiples of any kind. There is nothing to attribute a figure to. What HMRC does publish is more useful: goodwill is the benefit and advantage of the good name, reputation and connection of a business, it may comprise reputation, customer connections, location, non-competition covenants and trade secrets, and — critically — goodwill attributable to the proprietor's personal skills does not transfer unless it is tied in by contract. In an owner-fronted agency that is most of what a buyer thinks they are getting.

Only if you are a sole trader or partnership. In a company it is not a chargeable gain at all. CTA 2009 s.715(1) applies Part 8 to goodwill as it applies to an intangible fixed asset, and s.715(3) gives goodwill its accounting meaning including internally generated goodwill. CIRD10110 confirms Part 8 is a comprehensive set of rules under which receipts are revenue items. So a company selling a lettings book produces a taxable credit taxed as income in the corporation tax computation, with no Business Asset Disposal Relief available, and rollover sits under CTA 2009 Part 8 Chapter 7 reinvestment relief rather than TCGA s.152. A sole trader or partnership selling the same book is within TCGA 1992 and can claim BADR. That is a very large difference in outcome for the same commercial transaction.

Usually none, and this is badly under-appreciated in agency deals. CTA 2009 Part 8 Chapter 15A, inserted by Finance Act 2019, governs relevant assets acquired on or after 1 April 2019. Relevant assets under s.879A(2) include goodwill, customer information of a business, customer relationships whether contractual or not, unregistered trade marks and licences over any of them — a lettings book or block of management contracts sits squarely inside three of those categories. But relief is only available where the acquisition includes qualifying intellectual property assets, defined by s.879J as patents, registered designs, copyright, design rights, plant breeders' rights and equivalents. A typical agency acquisition contains none of those, so s.879I(4) denies annual relief entirely. The cost is relieved only on a later realisation, and then as a non-trading debit that cannot be carried back or form part of a trading loss.

18% on qualifying gains, up to a £1,000,000 lifetime limit. The rate has moved twice: 10% for disposals on or before 5 April 2025, 14% between 6 April 2025 and 5 April 2026, and 18% from 6 April 2026. Both step-ups were enacted in Finance Act 2025 s.8, so the 18% is legislated rather than announced. For a company share disposal you need the two years ending with the disposal as the individual's personal company and a trading company, with the individual an officer or employee. Personal company means at least 5% of ordinary share capital and 5% of voting rights, plus entitlement to either 5% of distributable profits and assets on winding up or 5% of proceeds on a notional disposal of the whole share capital. The trap for agencies is the trading company test, which looks at the whole company — an agency holding a material investment property portfolio alongside the trade risks failing it.

It can, but a client list alone is not enough, and HMRC uses this exact scenario to make the point. VTOGC3600 requires the part transferred to be capable of separate operation and of carrying on an independent economic activity, rather than being a simple transfer of assets — and cites FMCG Home Services, where a book of clients transferred without accompanying supply-making activity did not amount to a business. The factors HMRC weighs, at VTOGC3300, are worth documenting the deal against: a common understanding that a business rather than assets is being transferred, premises, plant and equipment, transfer of staff under TUPE, use of the trading name, customer lists — expressly noted as insufficient alone — assumption of customer and supplier contracts, goodwill, restrictive covenants, the contract of sale and how the sale was advertised. No single factor is conclusive, and a transfer of shares is not itself a TOGC.

The client account, before the profit and loss. It is the fastest way to find out whether the business is what it says it is: whether the reconciliations are current, whether the reg 6(3) records identify who each sum is held for and against which interest in land, whether the audit reports for the last several years were clean or merely substantially compliant, and whether the AML registration is live and covers every premises. Those answers are cheap to obtain and expensive to be wrong about, because a client account shortfall or an unregistered premises follows the business. On the sell side, the same list is the one to fix before you go to market rather than during diligence.