Succession Planning

Approximately 75% of private firms in the UK are family owned.

However, fewer than half of first-generation family businesses have succession plans. Common reasons include resistance by the owner to let go of the reins, fear of retirement or the inability to find or choose an effective successor.

Whatever the reason, transferring ownership of a business is often ignored until it becomes a pressing issue. This can often mean that the owner does not realise the maximum return for his or her business, the tax aspects of the disposal are not examined in sufficient detail and that the business falls into reluctant or incapable hands.

Yielding the maximum return is the key priority for most people and effective tax planning is a significant part of this process. Many of the decisions you will face will have important tax consequences, for example:

  • if I own a company, do I sell the shares or the trade and assets?
  • are there any rolled-over gains which will crystallise on disposal?
  • will an earn-out deal affect the amount of tax I pay and will the timing of the payment be affected?
  • are there any opportunities to take advantage of potential exemptions under the substantial shareholder rules for companies?
  • how is the inheritance tax position affected in the longer term?

We develop long term relationships with our clients to ensure that the most tax-efficient options available to you are thought out well in advance of the point of sale.

Contact Euan Fernie or Lachlan Fernie for more information on how we can help.