Top Tax Tips for Owner Managed Businesses
9. Succession Planning
When passing the family company to future generations, it is important to consider the structure adopted to ensure that no unexpected tax liabilities arise on both the outgoing and incoming shareholders.
It may be possible to gift shares to the children in a tax neutral way.  Alternatively a sale of the business to the children through an earn out mechanism could provide a way for the retiring shareholders to withdraw future monies generated from the company at 10%.
Consideration should be given to the income tax, capital gains tax and inheritance tax implications and the benefit of applying for pre transaction clearances from HM Revenue and Customs.

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