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Date: 06/03/2019 | By: Simon Baldwin

This article on Exit was published by St. James’s Place Wealth Management and full article can be read here

Selling your business can feel like a big weight off your mind, but you still need to work out what to do with the money.

Success comes with its own challenges.

It can take many years of struggling to grow your business before it gets to the point you can sell it for what you hoped on exit.

Yet getting it to that point is only part of the challenge. The next step is making sure you and your family can enjoy the benefits for many decades to come. But how?

Don’t be afraid to ask

Building up a business generally requires very different skills to selling it, and success with the former may well provide only limited help with the latter. Before you even sell your business, you need to be sure that you’ve done all the necessary tax planning. Otherwise you could lose out unnecessarily.

Once the exit sale has gone through, the question is what to do with the money. Leaving it in the bank will probably see it grow only very slowly; in fact, it may well cause the value to go down over time, due to low interest rates and the effect of inflation.

That means you might want to invest at least some of the money.

“You may have invested every single penny into your business and so don’t have a great deal of experience in making personal investments,” says Steven Lea of St. James’s Place Wealth Management. “Now, almost overnight you might have several million in that account. A professional adviser will be able to help you carefully manage this nest egg.”

You may still need some income, which will mean either staying in work or ensuring you’re able to draw the right income from the sale money. After all, you’ll no longer receive any income the business used to provide for you.

“It is important to consider different types of tax wrappers, so you have the flexibility to draw your income tax-efficiently,” says Steven. “You may also decide to gift part of your wealth to your children or grandchildren but would still like some control over the gift. You might consider a discretionary trust*, which has the added advantage of reducing the burden of inheritance tax on your estates, which might otherwise be considerable.”

The rest of the article can be viewed here