When looking to sell your business – cashflow modelling, budgeting, and effective tax management can help to achieve your goals.
Pre Sale Strategy
Getting your business ready is the first thing to do. We ensure your Articles of Association are up to date, we consider health implications and that contracts for employment are in place. Also that lasting powers of attorney and wills are in place as well as directors’ shareholder protection and keyman insurance so everything is covered.
It’s at this point where understanding what your retirement looks like and how far your capital will take you becomes important.
Most business owners have been business focused and less so on their personal finances. We use cash flow modelling to rebalance your present and future finances in line to where they should be.
This can reveal the option that you might need less and can therefore sell for less when the time comes giving you more freedom of choice.
Sale Strategy
All allowances need to be maximised including pension contributions that can also be carried forward to benefit from tax relief whilst simultaneously reducing cash on the balance sheet.
Capital Gains Tax can be mitigated using Business Asset Disposal Relief as long as the business is over 2 years old. This reduces CGT on certain assets to 10% on £1 million worth of lifetime assets.
Upon exit and corporate tax being paid it then becomes time to switch to personal taxation. We combine your dividend allowance, personal allowance, CGT exemption, savings allowance and tax free pension money to ensure your entitlements are used efficiently.
Inheritance tax also needs to be considered. Business relief did apply before, but now it isn’t there, so it’s important to use gifting, whole of life insurance and trusts to mitigate IHT.
Post Sale Strategy
Upon completion of the sale, your investments can be structured to provide for your lifestyle moving forward. Risk management will be different than when building your business. Continual review is important to ensure you enjoy your life and maximise your legacy to you family.
We combine investing and IHT mitigation whilst navigating changes in the markets and legislation to make the most of the proceeds from your business sale.
If you would like to talk about a financial strategy for selling your business with one of our FCA authorised wealth managers, arrange a Discovery Call [Here]
This article is for informational purpose only. It does not constitute finacial, tax or legal advice, nor is it a recommendation to buy, sell or hold any investment. Past performance is not a guide to the future, investments rise and fall so investors could make a loss. No view is given on the present, future value or price of any investment and investors should form their own view on any proposed investment.