Our recent experience is that a clear exit is theoretically possible, but practically very difficult. Some of the practical difficulties are often overlooked.
Responsibility for clear exit lies with the vendor, but the consequence of not achieving a clear exit lies with the purchaser. A purchaser placing primary reliance on clear exit (as opposed to, say, tax warranties or indemnities) must have full oversight of process.
It goes without saying that this process must carefully determine which tax-related liabilities and periods are covered by the TSA and the methodology required to determine the reasonable allocation of each - including how each will be documented (even if there’s a nil liability).
Contribution amount formulas in TSAs frequently refer to the tax position of all the members of the vendor’s tax group, not just the sale entities. What is the impact of a subsequent amended assessment in relation to an unrelated matter on the target entity’s contribution amount? Is the final contribution amount reasonable. Consider carefully the pay as you go (PAYG) instalment and loss allocation mechanisms in that formula.
It is highly unusual for all the information in respect of the non-sale entities be made available to the purchaser. Will you be allowed to undertake any due diligence procedures in respect of the non-sale entities and will group information required per TSA be shared?
Share sale agreements usually require draft clear exit calculations to be provided to the purchaser in the days prior to completion. However, consider an earlier 'dry run' of the process to flush out any issues (including the purchaser having the opportunity to review all notices, calculations etc.)
Finally, check when each member (not just the sale entities) acceded to the TSA. A significant gap between an entity joining the tax group and acceding to the TSA may prevent any entity achieving a clear exit for the relevant tax period.