Business Exit & Succession Planning
Many business owners are so caught up in the day to day running of their business that they never take the time to put together a plan to maximise the benefits (financial or otherwise) they can achieve on exiting the business at some future date. This lack of foresight leads to them (and their families) never fully enjoying the fruits of their labour, often unnecessarily paying excessive taxes and can even threaten the future viability of the business.
In terms of exiting your business, the main options are outlined below and are not always mutually exclusive so for example you might combine disposing of shares to a child with a share buyback:
· Disposal to one’s child
· Selling to your Management Team
· Trade Sale
· Share buyback
· Voluntary Liquidation
There are also some age related reliefs which you may be unaware of. Retirement Relief of up to €750k on qualifying assets is available between the ages of 55 to 65 inclusive with no requirement to actually retire. It reduces to €500k on your 66th birthday. You can dispose of a business to your child between the ages of 55 to 65 inclusive and get full CGT relief but it reduces to €3m at age 66. Your child as the recipient can claim business relief thereby reducing the value of business assets (and related gift tax) by 90%.
Exiting your business is a big decision and needs to be considered within the context of everything else you have going on - Family, Health, Succession, Financial Considerations etc. Every individuals’ circumstances are different and there is no ‘one size fits all’ solution. Similar to piecing together a complex jigsaw puzzle, we need to study all of the pieces and work out how they can best be put together to arrive at the picture you like best. As you would expect there are legal, taxation and financial consequences to the different options available to you and they all need to be considered. This is our area of expertise. We have the team with the necessary skillset and the experience gained over many years dealing with people such as yourself.
If you would like further information or to meet to discuss your circumstances in more detail, don't hesitate to contact us on (01) 293 7200 or use the form below.