Selling your business?: Engage Guide to Wealth Management…

Part4: Tax Planning & Risk Management

The strategies implemented to manage and organise tax.

Your single largest expense will be your tax bill.

We work with your accountant to decide what’s the best structure for your capital. Is it to invest personally, is it via a family investment company?

We’ll want to utilise all your annual allowances where possible.

We believe in elegant simplicity.

We have seen people spend lots of time and money creating increasingly complex strategies, only to spend more time and money unwinding these same strategies.

Tax is just one of the prices of success. The easiest way to pay less tax is to earn less.

Do you want to earn less?

Didn’t think so!

The considerations we need to prepare for and protect against.

The are a number of risk management issues for those that have exited or are about to. Some can be insured against, the rest can be prepared for. Below are some areas of risk management.

Life Insurance

This pays out a tax-free lump sum if something happens to you. Depending on how central the entrepreneur is to the business, it might be prudent to over-insure for the period leading up to a sale, in case of emergency.

Post-sale, life insurance is potentially less relevant, but the loss of regular income and future income generation is something that life insurance can cover. The starting point for life insurance is determining your need. What risk do you want to eliminate? Then determine the best solution for you to solve that need.

Debt

To keep or pay off your mortgage? This is often one of the fundamental questions for entrepreneurs or business owners who have sold their business. The easy answer is that everyone’s views of debt are their own, and there is no right or wrong answer.

Some people consider paying off their mortgage to be a key life goal; others think they can do more with the money in their pocket, so they choose not to pay it off.

We believe that discussing mortgages and other debts is a vital part of the planning process: What rate are you paying? Could you achieve better returns on capital than paying down debt? Is there a mix of both that works for you?

Estate Planning

Estate Planning is not just the traditional actions of gifting assets and having a Will (although both of these are important).

We tend to see it a little differently.

• You worked hard to earn money

• We want to make sure that money is protected

• In case of emergencies we want that money to have a future direction

• Divorce is a key factor in wealth destruction

• If you were to pass away, is it likely your spouse/ partner would marry or re-marry given their age?

That is all estate planning is at its core. You get one of two options with your money: The Government Plan or Your Plan.

Estate planning is the broad term for how you manage this.

Direction

• Guardianship - Who will take care of those in your legal care?

• Medical Directive – Who will make health care decisions if you can’t?

• Financial Directive – Who will handle your financial decisions if you can’t?

• Will - Where will all those key belongings go that aren’t able to be titled in your estate?