Making the best exit
The pandemic has been a catalyst for many major business decisions over the past few months. In a recent blog, we talked about how it potentially gave people the opportunity to develop a side hustle and turn that into a business. For others, further along their business journey, it has potentially been the catalyst to think about selling or retiring.
People exit their businesses for myriad reasons – it might be doing well and will potentially attract a good price or, at the other end of the scale, it might be doing badly and need closing down. In the middle are many other reasons – the marketplace might have changed or the owner might simply be looking to retire.
Here at Lewis & Co, we always suggest that business owners tell us about their plans in good time, so we can help them with their business exit strategies. We can ensure owners extract the maximum amount from the business, whether it’s being closed down, passed on in some way or sold. We can also help to make the disposal as tax efficient as possible and make sure the business owner takes advantage of Business Asset Disposal Relief, for example.
Previously called Entrepreneurs’ Relief before 6 April 2020, Business Asset Disposal Relief means you’ll potentially pay tax at 10% on all gains on qualifying assets. To qualify for relief, both of the following must apply for at least two years up to the date you sell your business – that you’re a sole trader or business partner and that you’ve owned the business for at least two years. The same conditions apply if you’re closing your business instead. You must also dispose of your business assets within three years to qualify for relief.
Our team can also support anyone who is planning for retirement – whether a business owner or an individual – and it’s never too early to start doing that.
Being prepared for retirement is more important than ever, as we are living longer. According to the ONS, as of 2020, there were estimated to be 15,384 people aged 100 or above in the UK, representing 0.02% of the population. In the past two decades, there has been a 58% increase in the number of UK centenarians. If you retire at around 65, you could face more than 30 years as a retired person.
At Lewis & Co, we assist clients to see what their income will look like post-retirement, help them to calculate what they need to be putting aside and the best means to do so according to their circumstances. Unsurprisingly, our conversations at this time are less about the money but more about the hopes and dreams clients have for their retirement years.
According to a recent survey by Aviva, one of the top things people want to do when they retire is to go out and explore far flung places they may not have been to before.
More than 40% of respondents to the survey put travel at the top of their bucket lists, with cruises and round the world trips proving very popular (23% and 20%). Many people listed journeying to see specific sights, such as the Northern Lights (27%), while others want to go overseas in order to have specific experiences, such as whale watching (nearly 13%).
Whether we are supporting clients with their retirement or business exit strategies, at Lewis & Co, we will find ways to provide you with a continued stream of income, using the most tax efficient methods. We constantly strive to maximise your wealth, whilst minimising your tax liabilities.
If you’ve got any questions or need any help, please call our team on: 01892 513515 or email: info@lewisandco.biz