Business sale case study

/Business sale case study
Business sale case study2018-09-14T15:22:28+00:00

Key issues to consider when selling a business

  • Taxation issues from sale of business
  • Structure of investments
  • Using funds to plan for future retirement

Marie and John* are existing clients who were in the process of selling their business. They were worried about how much tax might be payable from the sale proceeds, and unsure what to do next. They had decided to retain the business premises as well.

Strategies

  • Minimise the tax from selling the business
  • Get the property and other investments in the right structure
  • Invest the surplus funds from the sale
  • Start planning for future retirement

To achieve the best outcome the Accountant needs to work closely with the Financial Planner. This is a core strength of Hales Douglass as all the required services can be provided seamlessly in-house.

Outcome

  • Small business CGT concessions were used to ensure there was virtually zero tax payable from the sale of the business.
  • A self-managed superannuation fund (SMSF) was set-up and the business property and another investment transferred to the fund. Existing superannuation funds were rolled over.
  • Most of the sale proceeds were contributed to the SMSF in the most efficient way, based on the client’s current situation, creating a very tax effective structure. A superannuation pension was created soon after.
  • A suitable investment strategy was set for the fund and well-diversified investments placed, based on current and future retirement objectives.
  • Personal insurances were reviewed taking into account all of the changes taking place and some existing cover transferred to the SMSF ownership.
  • Estate Planning details were reviewed to ensure that Assets pass according to their wishes should anything happen to either of them.
  • Marie & John* have a better understanding of their retirement needs and what they would like to achieve. We will continue to work with them to ensure they remain on track to achieving these goals in the most tax effective way possible.

* Real names have been changed to respect privacy.

Please contact Andrew Hare or Andrew Clegg for more information regarding these strategies.

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