There comes a time when our clients want or need to retire. Some do so by selling their business or handing it down to the next generation and immediately taking on retirement pursuits. Others prefer to transition to retirement gradually, in line with a detailed and gradual succession plan. Either way, their retirement and the succession of the business will have tax consequences that can vary significantly depending on the business structure, tax profile of various assets and taxpayers, and the steps taken to give effect to the succession and retirement. Practitioners should consider the tax implications of likely strategies well before their client begins writing their retirement speech or LinkedIn post. This presentation delves into the tax implications arising from the dismantling of structures and the implementation of succession plans for family businesses, including:
- Exiting stakeholders and structures, including the impact that this can have on the tax profile of family entities
- Extracting personal wealth and assets from an entity upon or in the lead-up to retirement
- Separating out one or more businesses and / or investments between family members or entities
- Transferring assets to related family entities
- Application of the share buy-back provisions
- Funding succession / transition; and
- Earn-out arrangements