Taking a Bow: Exiting the Business Stage

You may love being in business and can't imagine giving it up. But few business people die in the saddle. At some point in the future, you'll probably find that you're ready to exit stage left. Illness or injury may stop you from working, or you may just want to retire.

If you don't have an exit strategy, the people who inherit may have to sell or wind up your business. After all, the main beneficiary of your will may not have the skills or inclination to run your business. One way around this situation is to leave your business through your will to someone who is up to the job of running it. However, if your business is a major part of your estate, then your spouse or dependants may have an automatic legal right to it. (Refer to Chapters 4 and 8 for more details.)

If you decide to hand over the business to a family member, you'll be helping to secure your loved one's future and saving on IHT.

Three clear early-exit strategies you can adopt are:

Taking a Bow: Exiting the Business StageSell your business.

Taking a Bow: Exiting the Business StageWind up your business.

Taking a Bow: Exiting the Business StageTransfer the business to a family member.

I look at each of these steps and their tax implications below.

Taking a Bow: Exiting the Business Stage

Web sites specifically designed for business owners include the Government's Business Link, at www.businesslink.gov.uk and the Federation of Small Businesses at www.fsb.co.uk. Both sites have info on selling or passing on your business to others.

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