Selling the business

Businesses are not simply machinery and premises. In fact, much of the plant is often hired. Instead, a business is a bank of loyal customers and a reputation. A business sold as a going concern (still running) is usually worth more money than one that's been broken up.

You have the choice of selling to a rival, to someone who wants to enter the market, or through a trade sale.

Selling to a rival or to a new entrant into the market usually ensures the best price, although, naturally, this depends on the strength of the business. Alternatively, you could sell your business by advertising in a trade magazine such as Daltons Weekly. Check out, too.

From a tax and estate planning perspective, selling up offers both an advantage and a pitfall.

The key advantage is that you convert an illiquid asset, which can vary in value quite wildly, into cash: A liquid asset with a rock solid value. This situation can make it easier to plan for your future and that of your family.

However, from a tax perspective, the downside of selling up is that some business assets come with IHT relief. By selling up, you convert an asset with tax breaks to one with none – cash. Remember, as far as reducing any IHT bill is concerned, cash is not king! Spend the money wisely by using exempt transfers and making gifts.

Selling the business

If you're in a business partnership, your partner probably has first refusal on your share of the business.

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