3 valuable ways your financial planner can help you prepare for a smooth exit from your business 

No matter how passionate and dedicated you are to your business, there’ll likely come a time when it feels right to move on. Perhaps an exciting new venture is in the offing, or you’re ready to retire and enjoy more time with your family.

Whatever’s driving your need for change, exiting your business is one of the biggest decisions you’ll make. After years of hard work and commitment, you’ll want to make sure your company passes into safe hands and that you achieve what you need for the next chapter in your life.

However, many entrepreneurs avoid exit planning. According to research published by FT Adviser, revealed that almost half of UK business owners admitted they did not have an exit strategy in place.

Unfortunately, failing to prepare well in advance – three to five years ahead of time is generally recommended – could make it harder for you to achieve your exit goals. For example, a rushed sales process could force you to accept a lower valuation, leading to a financial shortfall in retirement.

Read on to discover three important ways your financial planner can help you prepare for a smooth and successful exit from your business.

1. Identify your exit goals

When you think of what you want to achieve from selling or passing on your business, it’s normal to focus on the headline sale price. However, there’s a lot more to consider than how much money lands in your bank account once the deal is done, including:

• When you want to exit
• What you want to do afterwards – retirement, investing or a new project?
• Who you want to sell or pass the business to – an external buyer or a family member?
• How much income you’ll need over the long term.

These are important questions that may feel daunting to answer when you’re caught up in the emotional journey of passing your business on.

Your financial planner can help you take a step back from the process and define what a successful exit means to you by asking pertinent questions and translating your goals into measurable targets.

2. Calculate how much you need from a sale

Once you know what your goals are, the next step is to work out how much money is “enough” to fund what comes next, be that retirement or new business plans.

Your financial planner can use cashflow modelling to give you a clear picture of your post-exit income needs, considering factors such as tax, inflation and your longevity. This allows you to enter negotiations with confidence and make informed decisions about any offers you receive.

If you’re passing the business on to family, your priority may be to maintain continuity and build a legacy, rather than maximising financial gains. However, it’s crucial that you consider and safeguard your interests too.

Your financial planner can model different succession scenarios to help you balance your personal financial needs with those of the business and the next generation of owners. For example, they can ensure you retain sufficient wealth for retirement security while structuring the transfer tax-efficiently to avoid family disputes or unintended inheritance tax bills down the line.

3. Maximise tax savings

Without careful and early planning, your tax liabilities when selling a business might be higher than they need to be, which could significantly reduce your net profits.

When selling a business in the UK, the main taxes you might pay include:

• Inheritance tax – Sale proceeds may be added to your estate and taxed in the future
• Income tax – If you extract profits as salary or dividends pre or post-sale
• Corporation tax – Companies usually pay 19 – 25% on gains from selling assets (not shares)
• Capital gains tax – Levied on profits from selling shares or assets at 18% (basic-rate taxpayers) or 24% (higher- and additional-rate taxpayers) after your £3,000 annual exemption (2025/26)
• Stamp duty land tax – Applies to property transfers.

The type and amount of taxes you face will depend on the type of sale you choose and how it’s structured.

Your financial planner can help you maximise tax savings by:

• Structuring ownership with care
• Using pension contributions strategically
• Ensuring you make the most of available tax reliefs
• Planning how to invest sale proceeds tax-efficiently.

When it comes to achieving a tax-efficient exit from your business, early planning is crucial – once contracts are exchanged, your options may be more limited.

Your financial planner can ensure you understand your likely tax exposure and help you optimise the structure of your sale well before you agree on a sale.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.