Do you own a business in Ireland? What are your plans for the future? What will happen if you decide to take a step back or start another business? Are you hoping a family member will take over from you? There are considerations for the company itself, plus factors that may affect your personal situation – for example in the areas of pensions or tax planning.
We recommend you seek advice well before your anticipated exit from a business or farm. This helps you to capitalise on any opportunities to maximise the value of your business asset but also to ensure you meet the conditions of any reliefs or exemptions you may be eligible for and avoid any common pitfalls.
Do you know if you should dispose of your assets in one go or over time? Do you know whether it’s better to sell up, divest, or restructure? Who else should benefit from the sale or transfer of your business? There is no single answer because effective tax planning must be tailored to your situation and help you achieve your financial goals.
Expert advice when selling a business in Ireland
Whether transferring your assets during your lifetime and/or afterwards, we can advise you on the best way to achieve your desired outcomes. We provide an independent view of the business and impartial analysis of your situation. We work with business owners, but also with people who have built up significant investments, land holdings, or wealth.
We can support you with:
- Succession planning
- Transfer or sale of a business asset
- Tax planning
Succession planning
If you are transferring a business or farm to a family member or key employee, ensuring they are ready for the responsibilities involved is often a concern. You want to know the business will continue to thrive after you have left, and a succession strategy will help to position the company for ongoing success and performance. However, it’s also important to consider how and when to transfer the business as well as how other family members can be provided for – both now and in the future.
Transfer or sale of a business asset
Selling, or disposing of, a business is a major decision. We support you in ensuring the business is optimised for a profitable sale, considering all the implications when it comes to shares, assets and liabilities, structure, rights, reduction of risk, etc. We will help you get your financial ducks in a row and financial statements, and can work with trusted partners to carry out due diligence, source a valuation, negotiate the sale, and prepare closing documents and transfers of elements such as licenses and permits.
Tax planning when exiting a business
When disposing of a significant asset such as a business or farm, you will obviously want to be mindful of your tax liabilities. We will identify ways to minimise your tax liability, looking at the timing of your exit as well as how to offset any expenses, make use of exemptions, and target any tax reliefs available. We can also advise you on the best way to protect the value you have created in selling your business, including pension planning, retirement planning, and inheritance tax planning.
How are business sales and transfers taxed?
While the uplift in value when selling or transferring a business may be subject to Capital Gains Tax (CGT) at 33%, we may be able to apply reliefs such as Entrepreneur Relief or Retirement Relief to part of your liability (depending on your specific circumstances).
Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances, payable by the person receiving the asset. There are different exemption thresholds for CAT, but any benefits in excess of these are taxed at 33%. Again, there are reliefs available to potentially structure a transfer to minimise the taxes due.
As with selling a property, certain assets such as businesses will incur stamp duty when transferred or sold. However, there are also potential exemptions, reductions, and mechanisms to exclude certain elements of a sale from stamp duty liability.
A holistic tax planning strategy
All tax reliefs and exemptions come with a complex web of qualifiers, conditions, and knock-on effects (both tax-related and not). The most obvious option may not be the most beneficial long-term, which is why it’s important to get advice that is tailored to your specific situation and balances all your objectives.
Plan your exit strategy in advance
It’s never too early to start planning. In fact, we suggest you have a plan in place several years before your expected exit from the company so that you can minimise or eliminate tax upon the transfer or sale. It is often too late to reduce the tax liability after a sale has taken place, or where the death of a business owner has occurred.
This is why it’s a good idea to have an ongoing relationship with a business and tax advisor. After your main strategy has been established, it can be reviewed and revised on a regular basis to take account of changes in your situation and as well as any new schemes or changes in legislation. Once you are ready to dispose of your assets, you can go ahead in complete confidence.
How can TaxAssist help with exit planning?
If you are ready to make a plan for the day you step back from or sell your business, you’re in the right place! We aim to make this process pain-free while giving you peace of mind about the future of your business.
It starts with a meeting to find out what your goals are and gather the practical details we need about the business and your personal situation. Following that, we research any additional background or context needed and compile a report, which we go through with you so that we can answer any questions you have or adjust the plan if new information comes to light.
This service is relatively quick, so if you have already made a start on selling your business and need a sense check before going any further, you have time to pause and gather the facts before you commit.
Ask us about selling/exiting your business
Whether you have questions or are ready to get started, get in touch with us today via our contact form or by calling 01 854 0664.
Our team of experienced, independent, and friendly advisers will work to understand your business to allow them to make appropriate recommendations. We know managing taxes yourself can be difficult and time consuming which is why it pays to seek tax advice from a professional tax advisor who has supported people and businesses in your position many times before.