Archive for the ‘Wealth Management’ Category

Selling your business

Thursday, January 7th, 2010

Selling a business involves several important business and taxdecisions. The most important are

Valuation. Valuing businesses is complex and needs expert advice. It may mean using benchmarks from comparable busiensses in the same sector.

Timing

This is important both to

  • get a good price
  • maximise tax reliefs e.g. retirement relief

Company sales involve other decisions

  • Sell shares or sell assets?
  • What to do with company property?

Shares vs Assets

Selling shares is simpler for the seller. It may also enable CGT deferral via share for share sales.

Purchasers prefer to buy assets as there is less risk of hidden liabilities e.g. revenue audits. To get a sharesale you will have to give tax indeminities.

Property

Even at today’s lower values company premises may have a high value. They may not interest the purchaser, for example in a management buyout. They also have a stamp duty cost to the buyer.

It may be worth restructuring to remove them from the sale.

The many issues in a company sale mean you should consult professional tax advice

Passing on assets to the next generation

Thursday, January 7th, 2010

Passing on asets to the next generation is clearly on of the biggest steps an individual takes. Personal objectives for their families is paramount. however, they also seek to minimise tax costs.

Planning and advice are critical to these decisions. A good tax adviser will play a major part. Some issues to consider are

Current low capital values.

 Making a gift is a disposal for Capital Gains Tax. Low asset values minimise this. therfore, now may be a good time to consider passing on assets.

Use of reliefs

Taxpyers should organise theirtransactions to use reliefs such as

  • Retirement relief for Capital Gains Tax. This need not mean actual retirement
  • Business and Agricultural Property Relief¬†
  • Principal Private Residence

Possible use of trusts

These can be used for example to

  • care for incapacitated relatives
  • pass assets to children while ensuring responsible use
  • manage CAT thresholds and liabilities

Family partnerships

These are structures to enable involving your children in business without ceding control. They get around some of the complexities of trusts