For many entrepreneurs, the desire to sell their business is a trigger to reconsider their finances. But financial planning and investment management is important at all life stages. We were recently approached by an entrepreneur who wanted to exit their payment technology firm in two to three years’ time.
The client was aware that they had little time to focus on structuring their personal finances and were not maximising opportunities to be tax-efficient, protect or grow their wealth. They wanted to ensure they would be able to maintain their lifestyle once they had sold their business and to provide for the next generation.
At Investec Wealth & Investment we help individuals meet their life goals. Our first step for this entrepreneur was to provide full visibility of available cash and assets by creating a balance sheet.
We then ensured they were benefiting from relevant tax-free growth allowances by putting capital into an ISA and pension – and we did the same for their family members too.
With a full picture of outgoings and aspirations, we could determine the level of income the client would need once they had exited their business and look into creating a balanced investment portfolio that could deliver a regular return while they explored new opportunities.
Ahead of a sale, we highlighted that some shares could be held in trust for future generations as part of a succession plan, to reduce inheritance tax liability.
The client was able to consider the impact of selling their business on their personal situation and make the decision that was right for them and their family with great peace of mind.
With short and long-term needs addressed and our support, the client was able to consider the impact of selling their business on their personal situation and make the decision that was right for them and their family with great peace of mind. They sold their business, before investing in a new venture in the same sector months later
This case study is based on genuine examples from Investec Wealth & Investment but some details may be changed.
Tax treatment depends on the individual circumstances of each client and may be subject to change in future. All statements concerning tax treatment are based upon our understanding of current tax law and HMRC practise and can be subject to change. The information contained in this publication does not constitute a personal recommendation and the investment or investment services referred to may not be suitable for all investors. The value of investments can go down as well as up and you may not get back the full amount invested. Your capital is at risk.