Ideas.

The importance of LPA’s, why everyone should use them

Key considerations for business owners when selling their business and planning their personal finances

For many business owners, selling a business is the most significant financial event of their lives. A successful exit is not only about achieving the highest possible valuation, it is also about turning business wealth into long-term personal financial security, flexibility, and peace of mind.

When planning a sale, business owners should focus on the following areas:
1. Prepare the business for sale
2. Understand the tax position on sale proceeds
3. Define what happens next for you personally
4. Review pensions and retirement planning in the run up to exit to maximise tax efficiency and use of allowances
5. Consider the impact of the business sale on estate & inheritance tax planning

Building the right advisory team, for the business and you personally is key where corporate finance advisors, lawyers, accounts and your financial planner are joined up.

There should be more discussion about the impending inclusion of pensions in inheritance tax. Before we know it, April 2027 will have crept up on us, and thousands will unknowingly see the amount they plan to leave to family members reduced as a result of this policy change. We should be seeing more coverage of the planning trends already emerging. Interest in annuities has increased, despite annuities having fallen out of favour for a long time. People are also looking to give away money and assets earlier rather than hold on to them until death, to avoid the charge altogether. The conversation needs to go further too. Initial costings suggested bringing pensions into inheritance tax would raise around £1.5 billion a year by 2030, but with people already adapting, that revenue figure will likely be lower by then. Given that we need people to save more for retirement, not less, will this end up discouraging them from doing exactly that?