26 Apr 2021

Succession planning for business owners

Nadine Collins

Associate Financial Planner

Passing on your wealth effectively and tax-efficiently

As an entrepreneur and business owner, you may have dedicated years of your life to building up your company and turning it into an effective generator of wealth. As the years go on, a growing concern is how you can leverage that success to provide for future generations of your family and give them every opportunity you’d wish for them.

 

Complex legislation around capital gains tax (CGT) and inheritance tax (IHT) can make it difficult for you to plan how to pass on your wealth and it sometimes feels impossible to navigate. Our experts can help you to understand the regulations that affect you and suggest solutions you may not be aware of to minimise your tax liability.

Everyone wants to secure financial freedom for their children and grandchildren. Here are some clients we’ve helped to do that.

Case study: Leveraging business shares for intergenerational wealth

Our client was an oil and gas company owner with dividend shares in the business. As a non-domiciled resident, he needed advice on structuring his wealth tax-efficiently and leveraging it for future generations.

How we helped:

Investec acted as a facilitator to pull together the different threads of the client’s financial situation, working with other parties, such as accountants. One of our recommendations was that shares held by individuals were restructured into a family investment company of £2.5 million.

Looking to the future:

The client’s wealth is now held more tax-efficiently, with a solution that allows for reinvestment of dividend income and long-term succession. This is an effective means of leveraging the client’s business success into intergenerational wealth, benefitting his family for decades to come. The client will be returning for future financial planning and has recommended us to a contact in a similar situation.

“My financial situation was extremely complex, but Investec took the time to gain a full understanding of it and were able to recommend a fitting solution. I’m grateful for the peace of mind that, not only will my children have the protection of financial security, but my family will benefit from it for generations.”

- Client of Simon Tabb, Senior Investment Director, Investec Guildford

Case study: Making financial gifts to loved ones

Our client, a business owner who has been a client of ours for over 30 years, wanted to make a large gift to her daughter and sought our advice on the most effective way to do so.

How we helped:

We considered and discussed the full range of options for raising capital, e.g.
 

  • Using capital she’d received from her business
  • Remortgaging a buy-to-let property
  • Drawing money from her investment portfolio
Based on her risk profile and current market conditions, we agreed the best course of action was to raise the money through borrowing, taking advantage of low interest rates.
Looking to the future:

The client was delighted we were able to explore all her options and recommend a solution and will be returning for any future financial planning needs.

“I place enormous value on your advice and consider myself very fortunate to be in such safe, capable hands.”

- Client of Justin Yeldham, Senior Investment Director, Investec Guildford

Solutions personalised to you

If you’re an entrepreneur or business owner and you’d like to investigate your options for passing on wealth to your loved ones, we can give you information that takes into account every aspect of your complex financial circumstances.

About the author

To contact or read more about Nadine Collins, visit her biography here.

Find out more

Whether you are looking to invest for the first time, or have an investment portfolio already, if you don’t know where to begin, or know exactly what you are looking for, we can help. Contact your local Investec experts in Guildford today, to discover how we can help you to fulfil your financial goals, and live life the way you want to.