Advice for business owners

The concentration problem

Business owners tend to have a large, illiquid, undiversified asset that also happens to be their income, their pension plan and their exit strategy. That is a lot resting on one thing, and it is usually the thing that gets the least planning attention because running it takes all the time.

Where we help

• Taking profit out efficiently. The mix of salary, dividends, pension contributions and benefits changes what you keep. Employer pension contributions are often the most overlooked route.
• Building something outside the company. Deliberately, over years, so that your retirement does not depend entirely on a sale happening at the right time and the right price.
• Planning an exit. What you need the sale to deliver, how the proceeds are taxed, and what happens to the money on day one after completion.
• Protecting the business from losing a key person, including key person cover and share protection so a death does not leave shares with someone the remaining owners never intended as a partner.
• Benefits that work for you as an employee of your own company, including relevant life cover and executive pension arrangements.
• Succession where the business stays in the family, which is as much an estate planning question as a corporate one.

What we are not

We are not accountants and we do not do your company's tax returns or statutory accounts. Most of our business owner clients have an accountant already and the work goes better when we speak to them directly. If the plan involves a mortgage, we refer that to a specialist: see mortgage advice for Forseti clients.

A trading business may qualify for business relief, but the cash it turns into on completion does not, so an exemption you have held for years can disappear on the day the sale goes through. That is worth planning for before the sale completes. Inheritance tax planning therefore needs to run alongside the exit rather than follow it.

Business Relief (BR) invest in assets that are high risk and can be difficult to sell. The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.