The number you agree is not the number that arrives, and it does not arrive on the day you sign. Almost every owner who sells an advice firm understands this in principle and is still caught out by it in practice, because the gap between the headline and the first payment is larger than expected, and the gap between the first payment and the last one is longer.
This article sets out the sequence. It is deliberately about mechanics and dates rather than about what to do with the proceeds, which is a question for your own adviser and your own circumstances.
The headline is a ceiling, not a payment
The figure quoted in an offer is the maximum the buyer expects to pay if everything they have been told turns out to be true and everything they hope for happens afterwards. It is built from your recurring income and a multiple, or from your profit and a multiple, depending on size. Recurring income remains the dominant basis: Gunner & Co reports it accounts for over 80% of offers.
Between that ceiling and your bank account sit four reductions, and it is worth naming them separately because they behave differently.
Diligence adjustments come first and are the most avoidable. If the income schedule does not reconcile, if a block of clients turns out to be non-advised, if the recurring income includes fees that will not survive the transfer, the multiple is applied to a smaller number than the one in the offer. This is the reduction that preparation actually prevents, and it is covered in why data quality determines price.
The retention or holdback is a slice of the price kept back against things going wrong in a defined window. It is not a penalty and it is not unusual.
Deferred consideration is the part paid later against time or performance, and is the subject of its own guide in deferred consideration.
Tax is last in sequence and first in size for most sellers.
A realistic payment order
The exact shape varies, but the order rarely does.
On completion. The largest single payment, and for most sellers still well short of the headline. This is the money that funds whatever you have planned for the period immediately after the sale, so it is the figure worth modelling rather than the headline.
The retention release. Held for a defined period after completion and released if the specified problems have not appeared. What counts as a problem is defined in the agreement, and the definition is worth as much attention at the negotiating table as the amount, because a broadly drafted retention can be held against events that have nothing to do with you.
Deferred tranches. Paid at set points, commonly running many months, sometimes measured against retained income or client retention. Where the payment depends on performance rather than merely on time, you are in earn-out territory, and the questions to ask before agreeing to it are in the questions to ask about an earn-out.
Anything recovered later. Escrow releases, adjustments settled after the event, disputed amounts resolved. This can run well past the point at which you have stopped thinking of yourself as a seller.
The tax dates do not move to suit the payment dates
This is the part that causes genuine cash flow problems, and it is entirely predictable.
Your Capital Gains Tax liability is generally assessed by reference to the disposal, not by reference to when each instalment lands. It is possible to owe tax on consideration you have not yet received. Where the deferred amount is unascertainable at the outset, the treatment is more involved still, and the interaction with relief is not something to work out from a website.
The rates themselves are dated and are worth stating precisely. For disposals from Mon 6th Apr 2026, Business Asset Disposal Relief is charged at 18% on qualifying gains, having been 14% for disposals between Sun 6th Apr 2025 and Sun 5th Apr 2026 and 10% on or before Sat 5th Apr 2025. The lifetime limit is £1 million of qualifying gains per person. Outside that relief, Capital Gains Tax is 24% for higher-rate taxpayers, and for basic-rate taxpayers 18% within the basic rate band and 24% above it. The annual exempt amount for 2026-27 is £3,000.
These are the rates as at the 2026-27 tax year. A Budget can change them, which is itself an argument for knowing your timetable rather than discovering it.
The practical consequence: the completion payment has to cover the tax on the whole gain, not the tax on the completion payment. Sellers who have mentally allocated the completion money to something else, and who then meet the tax bill for consideration still sitting in someone else's escrow account, have a problem that was visible from the start.
What to model before you agree anything
Three figures, in this order.
First, the completion payment net of tax, because that is the money that actually exists on day one. The net proceeds estimator turns a headline into that figure.
Second, the total across all tranches assuming everything goes to plan, which is the optimistic case and the one the offer describes.
Third, the total assuming the performance-linked elements pay nothing. This is not pessimism. It is the number that tells you whether the deal is acceptable in the case where you have the least control, which is the case after you have handed over the client relationships.
If the third figure is one you could live with, the structure is survivable. If it is not, the negotiation is not finished, whatever the headline says.
Where this sits
The route from headline to bank account is the least glamorous part of selling and the part most likely to produce an unpleasant surprise. It is worth walking through with your accountant before you agree heads of terms rather than after, because almost every lever that changes the answer sits in the structure, and the structure is settled early.
Working the sequence backwards
The useful discipline is to build the timeline from the end rather than the beginning, because the questions that matter are about the gaps rather than the totals.
Start with the last payment you expect and the date you expect it. Then ask what has to remain true for it to arrive: the client retention measure met, the retention period passed without a claim, the buying entity still able to pay. Each condition is a dependency, and writing them out in order usually reveals that the final tranche depends on things you will have no visibility of by the time they are decided.
Then work back to the first payment and ask the harder question: between completion and the final tranche, what does your own financial year look like? For many sellers there is a period in which the firm's income has stopped, the deferred consideration has not yet arrived, and a tax liability has fallen due on the full gain. That period is entirely predictable and entirely survivable if it is modelled, and genuinely difficult if it is not.
Two habits make the difference. Model the completion payment net of tax as though it were the whole price, and treat everything after it as a possibility rather than a plan. And ask the buyer, in writing, for the payment dates and the conditions attached to each one, in a single schedule. A buyer who has done this before will produce it readily; if the schedule is hard for them to assemble, that is worth knowing before you sign rather than eighteen months later.
Where the headline comes from in the first place
It is worth understanding that the ceiling is itself a range rather than a figure. This site's free IFA valuation calculator opens deliberately wide, at plus or minus a substantial margin, and narrows only as you tell it more about the firm, because that is an honest representation of what any buyer can know before diligence. The ranges it uses come from published market data rather than from any single acquirer's pricing.
The reason that matters here is that sellers who anchor on the top of the range and then experience the four reductions described above conclude that something went wrong. Usually nothing did. The headline was the optimistic end of a range, diligence moved it towards the middle, and the structure did the rest. Anchoring on the middle of the range net of tax produces a far more accurate expectation and a much better negotiation, because you are arguing about the structure rather than defending a number that was never firm.
Read next: your net proceeds for the arithmetic in full, how earn-outs are taxed for the treatment of the deferred parts, and the rest of the after the sale pillar.