What an offer paid over time is really worth
When part of the price comes later, the offer is worth less than the headline: the later money may not all arrive, you wait for it, and some of the tax can be due before you're paid. We work out what it's worth to you on the sale day, after tax.
Your answer
Enter the most you could be paid later, the day the sale finishes and when the later money is due to see what the offer is worth.
About this calculator
For owners who've been offered part of the price on the sale day and part later: a set amount paid later, or one that depends on results (an earn-out), in cash or loan notes. It shows what the offer is worth to you on the sale day after tax, what you'd have if none or all of the later money arrives, when the tax is due, and the extra cost if the later money is taxed as pay.
You type the terms in: the two amounts, the dates, how much you expect, what your shares cost and your other income. We don't read the sale agreement. Whether the later money is pay, and whether you qualify for the lower business-sale rate, are asked as questions, not checked.
It works out tax for England, Wales and Northern Ireland, for sales from 6 April 2026 with the later money due by 5 April 2031. It doesn't value your business or say whether to accept the offer.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
A set later amount is taxed in full on the sale day, and tax comes back if less arrives. When it depends on results, your right to it is valued on the sale day (what you expect, less the wait) and taxed then. Anything more that arrives is taxed when it comes, at the usual rates. If less arrives, the loss can be set back against the sale.
If you lose the money by leaving, we tax it as pay when it's paid. Loan notes put the tax off until they're paid off, but at the usual rates. If you qualify for the lower rate, we compare that with choosing to pay on the sale day. Every payment and tax bill is then brought back to the sale day at your yearly return.
In the example, £1.5 million comes on the day and you expect £600,000 of up to £1 million, depending on results, two years later. The right is valued at £544,145 and taxed with the sale, the rest when paid. After tax and the wait, the offer is worth about £1,620,479 on the sale day.
Worked example
After tax and the wait, the offer is worth about £1,620,479 to you on the sale day: 64.8% of the £2,500,000 headline price.
England, Wales and Northern Ireland rates · 2026/27 rates for every year · later money taxed as a profit on the sale · later money in cash · lower business-sale rate · 5% a year for the wait · other income the same each year, counted as pay
| Cash on the sale day | £1,500,000 |
|---|---|
| Later money you expect (60% of £1,000,000), on 31 March 2029 | + £600,000 |
| Value of your right to the later money on the sale day, taxed then | £544,145 |
| What your shares cost you | £100 |
| Profit counted on the sale day | £2,044,045 |
| Taxed at the lower business-sale rate (18%) | £1,000,000 |
| Taxed at 24% | £1,041,045 |
| Less tax on the sale for 2026/27, due 31 January 2028 | − £429,851 |
| Less tax on the later money, due 31 January 2030 | − £12,685 |
| Money you'd get in total, after tax | £1,657,464 |
| Less the cost of waiting, at 5% a year | − £36,985 |
| What the offer is worth to you on the sale day, after tax | £1,620,479 |
Worked out using HMRC's rules for tax on selling shares when part of the price comes later (Taxation of Chargeable Gains Act 1992, sections 48, 116, 169Q, 169R and 279A), HMRC's Capital Gains Tax, income tax and National Insurance rates, and the yearly return you give for the wait. Whether later money is pay is HMRC's judgement, asked as a question. Not legal or tax advice.
Questions people ask
Why do I pay tax on money I haven't been paid yet?
A set later amount counts as part of the price on the sale day. When it depends on results, your right to the later money counts, at its value then. So the sale-day tax bill can be more than the cash you get on the day. If less arrives later, you can usually get some of that tax back.
When is the later money taxed as pay?
When it's really a reward for working, not part of the price: for example, if you lose it by leaving the business. Pay costs income tax at your top rate plus National Insurance, usually far more than tax on a profit on the sale.
Do I keep the lower business-sale rate on loan notes?
Not if you wait. The profit on loan notes is taxed when they're paid off, at the usual rates. If you qualify, you can choose to pay the tax on all of it on the sale day at the lower rate. That choice has a deadline, and we show which way costs less.
Want to explore an EOT?
We’ll walk you through the basics. No pressure. No commitments.
- Free call
- Clear advice
- Real numbers
Takes 60 seconds. You’ve got nothing to lose.
