UK residents selling a foreign business typically receive proceeds in 1–3 large transfers over 6–18 months, denominated in USD, EUR, or the local currency. On a €2 million sale, a 5% adverse GBP/EUR move between deal completion and final payment is £86,000. A specialist currency broker handles the conversion at FX margins of 0.2–0.5% versus 1.5–3% at retail banks — a difference of £25,000–£50,000 on a £2m proceeds figure. Forward contracts can lock today’s rate for earn-outs, deferred consideration, and escrow releases up to twelve months ahead, removing the FX uncertainty that an SPA payment schedule otherwise leaves untreated.
That’s the headline. The detail matters because business sale proceeds are rarely received as a single transfer. Most cross-border SPAs structure consideration as completion payment + escrow + earn-out + working capital adjustment — each landing on a different date, at a different rate, with a different FX exposure window.
Who this guide is for
This guide is for UK tax residents who own all or part of a foreign business they’re selling — a US LLC, an EU GmbH/SAS/SRL, an Irish limited company, or any overseas trading or holding entity. If you’re selling a UK business with overseas operations, the FX angle is different and our FX for UK business acquisitions and M&A guide covers it.
Tax circumstances on a foreign business sale are highly personal and depend on UK residence, the entity structure, treaty position, and Business Asset Disposal Relief eligibility. A qualified UK tax adviser specialising in cross-border M&A should always be consulted before completion. The official GOV.UK Capital Gains Tax guidance and HMRC double taxation treaties register set out the framework. This guide covers only the currency execution.
Why currency matters when selling a foreign business
Three FX-specific issues that M&A advisers flag less often than they should:
- Multi-stage consideration over 12–18 months. Completion payment at signing, escrow released 6–12 months later, earn-out 12–36 months later. Each stage is a separate FX exposure window. The earn-out is typically the largest individual exposure.
- SPA currency clause matters more than the price. If the SPA names a USD figure, the seller bears the FX risk between signing and each payment date. If it names a GBP figure, the buyer bears it. Negotiating this is often worth more than the headline price negotiation on smaller deals.
- Tax timing and FX timing are decoupled. UK CGT is calculated using HMRC exchange rates on the disposal date. The actual GBP value when funds reach the seller can be 10–15% different on a 12–18 month earn-out, and that difference is borne entirely by the seller’s net position.
Anthony Bull, CEO of Cambridge Currencies, comments that founders selling a foreign business tend to focus the FX conversation on the completion payment because it’s the largest single transfer — and ignore the earn-out, which often carries 12–18 months of currency exposure on a six-figure-plus amount. The earn-out is the FX risk that bites quietly.
What’s the typical payment structure on a foreign business sale?
| Stage | Timing | % of total | FX exposure |
|---|---|---|---|
| Completion payment | Day of signing | 50–80% | Lowest — known rate, immediate conversion |
| Escrow release | 6–12 months post-completion | 5–20% | Medium — fixed amount, rate has drifted |
| Working capital adjustment | 3–6 months post-completion | 1–5% | Low — small relative size |
| Earn-out | 12–36 months post-completion | 10–40% | Highest — large amount, longest exposure window |
The pattern that costs sellers most: locking the completion payment via spot conversion at signing, then doing nothing about the earn-out for 18 months, then converting at whatever rate sterling sits at on the day of receipt. On a €1 million earn-out, a 7% adverse GBP/EUR move is £60,000.
What are the main ways to convert business sale proceeds?
| Method | Typical FX margin | Speed | Best for |
|---|---|---|---|
| High street bank wire | 1.5–3% | 2–4 working days | Almost never the right choice on six-figure+ amounts |
| Private bank FX desk | 0.4–1.0% | 1–2 working days | Existing private banking relationship, integration |
| Specialist currency broker | 0.2–0.5% | 1–2 working days | £500,000+, multi-stage SPA proceeds, hedging |
For seven-figure deals, the difference between a high street bank at 2.5% and a specialist broker at 0.4% is approximately 2.1% — £42,000 on a £2m sale. Specialists are typically substantially cheaper than even private bank FX desks at this size, and they offer the same hedging tools.
How do you repatriate foreign business sale proceeds?
A typical end-to-end process for a UK seller of a foreign business:
- Negotiate the SPA currency clause early. Before signing, agree which currency the consideration is denominated in and which party bears FX risk for each stage. This is materially more important than founders typically realise on cross-border deals.
- Open a specialist currency broker account before completion. UK ID verification typically takes one working day. Source-of-funds documentation should be lined up: SPA, completion accounts, and a cover letter from your M&A adviser explaining the structure.
- Plan the FX strategy across all SPA stages, not just completion. Three patterns:
- Spot at each stage. Simple, exposes each payment to the rate on the day. Suits sellers who want to monitor markets actively.
- Forward contract for the earn-out. Lock the largest deferred exposure at completion-day rates. Removes 60–80% of the post-completion FX risk in a single decision.
- Forward contracts on multiple stages. Lock completion, escrow, and earn-out separately at the completion-day rate. Maximum certainty, suits sellers who prioritise budget predictability.
- Receive the completion payment in foreign currency to the broker’s segregated client account. Convert as planned (spot or against pre-booked forward).
- Track each subsequent SPA stage on a single timeline. Working capital adjustment, escrow release dates, earn-out measurement and payment dates. Each is a separate FX execution.
- Coordinate with your tax adviser on disposal-date treatment. The disposal date for UK CGT may not align with the dates funds are received. The exchange rate for tax calculation is HMRC’s rate on the disposal date, not the rate when each tranche actually lands.
- Receive GBP to your UK current account. Faster Payment from the broker, typically same-day or next-day after each conversion.
When does a forward contract make sense for an earn-out?
Earn-outs are the strongest forward contract use case in cross-border M&A. Three reasons:
- The amount is contractually committed (within a range). Most earn-outs have a target with caps and floors. The maximum potential payment is known and can be hedged.
- The payment date is known. Earn-outs typically reference a specific measurement period and payment trigger date. Forward contracts can be structured to mature at or near that date.
- The exposure window is long. 12–18 months is the sweet spot for forwards — long enough that meaningful FX moves are likely, short enough to fit within standard 12-month forward maturities (longer maturities are available for sophisticated clients).
Will Stead, head of currency at Cambridge Currencies, observes that around 70% of UK clients selling a foreign business in 2025 used a forward for the earn-out specifically, leaving the completion payment as spot (already received) and the working capital adjustment as spot (small relative size). The earn-out forward removes the largest deferred FX risk in one decision.
One scenario where forwards are typically wrong: highly variable earn-outs with broad caps and floors. If the earn-out can range from €0 to €3m, hedging the maximum locks you into delivering currency you may not receive. A partial hedge based on the most-likely range is usually the right answer.
Why use a specialist broker for a business sale repatriation?
Four practical reasons:
- Better rates above £500,000. Specialists work on tighter margins than high street and even private banks at this size. On a £2m sale, the typical saving versus retail bank routing is £30,000–£50,000.
- Forwards on multi-stage consideration. Structuring earn-out hedges, escrow timing, and completion payment together is bread-and-butter for a specialist; rare at retail banks.
- Phone-based dealing with a named contact. A cross-border business sale has multiple FX execution dates over 18–36 months. A single named UK dealer tracking the schedule, the SPA, and the source-of-funds paperwork is materially more useful than a relationship that resets each transaction.
- SPA-aware compliance. A specialist familiar with cross-border M&A documentation processes the source-of-funds review once, with the SPA and completion accounts, and applies the same review to each subsequent SPA tranche.
Cambridge Currencies operates via FCA-authorised partners Currencycloud (FRN 900199) and ScioPay (FRN 927951). Client funds are held in safeguarded client accounts throughout the transfer process. For the underlying tools, see our forward contracts explained and large international money transfers references, and the FX for UK business acquisitions and M&A guide for the buyer-side perspective.
Frequently asked questions
For amounts above £500,000, a specialist currency broker typically gives the best rate, with FX margins of 0.2–0.5% versus 1.5–3% at high street banks and 0.4–1.0% at private banks. On a £2m sale that’s the difference between paying £4,000–6,000 in margin versus £30,000–60,000. Specialists also offer forward contracts on earn-outs and escrow releases, which retail banks typically don’t.
It depends on which party can better bear the FX risk. If the SPA is in GBP, the buyer bears the FX risk for each payment and may price that into the headline number. If it’s in the foreign currency, the seller bears it but receives the headline number cleanly. UK sellers with no plan for hedging typically prefer GBP-denominated SPAs; sellers willing to use forward contracts often accept foreign-currency SPAs in exchange for a higher headline price.
Yes, via a forward contract. A forward fixes today’s GBP/USD or GBP/EUR rate for a payment up to twelve months ahead (longer maturities available for sophisticated clients), paying a 10% deposit on booking. Earn-outs are the strongest forward contract use case in cross-border M&A because the amount is contractually committed within a range and the payment date is typically known.
UK tax residents are liable for CGT on disposal of foreign business interests. Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) may reduce the rate to 14% for tax year 2025/26 (rising to 18% from 6 April 2026) on qualifying disposals up to a £1m lifetime limit. The CGT calculation uses HMRC’s exchange rate on the disposal date, not the actual rate when proceeds are received. A qualified UK tax adviser specialising in cross-border M&A should always be consulted before signing.
Earn-outs are typically valued and taxed at completion (under the Marren v Ingles principles), not when each tranche is received. The estimated value of the right to receive the earn-out is included in the disposal proceeds for CGT purposes. The actual GBP received later may differ from the estimate due to FX moves and earn-out performance — these differences are typically separate chargeable events. A UK tax adviser should always be consulted on earn-out tax treatment specifically.
A specialist broker will typically request: the executed SPA, completion accounts and any associated payment schedule, ID and proof of UK address, and a source-of-funds declaration covering the deal structure. For ongoing earn-out and escrow releases, the same documentation supports each subsequent tranche. UK money laundering rules apply across all transfers.
Typical timeline: same-day or T+1 wire from the buyer to the seller’s foreign-currency account on completion; same-day to the broker’s segregated client account; 1–2 working days for the FX conversion; same-day or next-day Faster Payment to the seller’s UK current account. Total typically 2–4 working days from the buyer’s wire to GBP in the UK bank. Forward contracts on subsequent tranches are settled at maturity dates aligned with the SPA payment schedule.
Speak to a Cambridge Currencies specialist about your business sale
If you’re selling a foreign business and want clear guidance on the GBP/USD or GBP/EUR rate, the option of forward contracts on the earn-out and escrow releases, and a single named dealer to handle the multi-stage conversion by phone, request a quote and we’ll talk you through it. We work routinely with UK founders selling US, EU, and international businesses across all major sectors.
