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HOW TO. . . MANAGE WEALTH
PLANNING YOUR BUSINESS FUTURE
by Helen Binns Partner, Beever and Struthers
Good decision-making is based on understanding your options from the outset.
Time spent planning in the early stages of your business will save you stress and money in the future.
Beever and Struthers has partnered with Pareto Financial Planning to expand the scope of the advice we provide and to help you get the most from owning a business.
Getting started
When starting a new business, it’s vital to have a vision and business plan at the outset.
You have the option to set up as sole trader, partnership or limited company, each of which has different tax rates and rules that can be difficult to navigate.
If you’re planning to grow and pass the business down through future generations, you’ll need a different structure in place than if you’re planning to set up and sell in a few years’ time.
It’s important to seek professional advice to determine which structure is best to support your business vision.
Unravelling a business to create a new structure is much more complicated than getting it right at the start.
Growth As the business grows the extraction of profits will become a key consideration.
As a limited company, you can extract profit through dividend, salary or a combination of both.
You may also be able to take advantage of certain tax reliefs and allowances, such as R&D tax credits.
As a sole trader or partnership, your options are more limited, but there may be other advantages such as lower compliance and professional fees.
Once established, consider if you’re looking to acquire other businesses or looking for a quick exit and sale.
Whichever you decide you’ll need a strategy that supports your future plans to minimise both Inheritance and Capital Gains tax.
Planning your exit Whether a trade sale, EOT or MBO, the sale needs to suit all parties.
A carefully planned deal structure can result in a better outcome more than just the highest sale price. Early planning can be invaluable.
If you’re retiring, then your pension plays its part.
Pension planning is something that should be considered throughout your business cycle.
You may not have the cash flow to support pension payments at the start, but it can be very tax efficient to start making pension payments at the earliest opportunity.
That pensions generally fall outside your estate for inheritance tax purposes is also a key consideration.
The need for support and advice continues following any exit from your business.
We can help you enjoy your well-earned retirement, with advice throughout your retirement in order to minimise the amount of income, capital gains and ultimately inheritance tax that you pay.
Pareto Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. Personal circumstances differ and not all of this information is applicable to every client and/or their business. This information is general in nature and should not be relied upon without seeking specific professional financial advice.
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