Financial planning before and after the sale.
Selling an electrical business is a business decision and a personal one. We can introduce you to specialist partners who can advise you before and after the sale.
Reads makes the introduction and runs the sale; the specialist partners give the financial advice.
Why plan around the sale
Running an electrical business can leave little time for your own finances, and for many owners the business is a large part of the retirement plan. A sale can turn it into a lump sum. Planning before the money arrives gives you time to think.
Your business
- The price and terms
- How the sale is structured
- Money taken out before it
The sale
You and your family
- Income for the years ahead
- Your pensions
- Protection for your family
- Passing wealth on
Your goals come first
Good financial planning starts with your goals: what you want life after the sale to look like, and how realistic that is with what you have. Only then does the talk turn to investments.
Fewer decisions made in a hurry
A large sum brings choices about pensions, tax and family, and some of them are hard to undo. Talking them through with a specialist can take some of the emotion out of those choices.
Before the sale
At this stage the planning is personal: where you stand now, what you will need, how things might be structured with tax in mind, and whether your pension will meet your needs.
Where you stand now
The starting point is a full picture: income and spending, savings, investments and property, and every pension you hold, including old ones from earlier jobs. It also covers how much of your wealth sits inside the business.
What you will need
Then comes a question many owners have not had time to ask: what will it take to live the way you want once the business is sold? That covers everyday living, plans you have put off and help for children or grandchildren, tested against what you have.
Structuring things with tax in mind
How and when money leaves the business affects the tax on it. A specialist can look at questions such as taking money out before the sale, paying into a pension through the company, keeping or passing on shares, and whether the sale is of shares or assets. What suits you depends on your circumstances, and the rules change.
Your pension
If the business has been your main way of saving, the pension side may have had less attention. A planner looks at the pensions you have, whether paying more in before the sale is worth considering, and how pensions and sale money might work together to give you an income. There are limits on what can be paid in.
After the sale
Once the sale completes, a specialist partner can help with what comes next: the money, protecting your family and the way you live, and the goals you have set.
What to do with the proceeds
A planner looks at how much to keep to hand, how much to set aside for income and what could be invested for the longer term, at a level of risk you are comfortable with. Leaving it all in the bank is a choice too: rising prices wear away the value of cash.
Protecting your family and the way you live
Life cover or income protection that came through the business may change once it is sold. A planner can look at protection for you and your family, and at whether your plans would hold up if your health or circumstances changed.
Helping your family, now and later
Some owners want the sale to help children or grandchildren, during their lifetime or after it. A planner can talk through ways of passing wealth on, and how gifts, pensions and inheritance tax fit together.
Wills, tax and other specialists
A planner's own work stops short of writing a will, other legal matters and complex tax, so good planners work with solicitors and tax specialists and bring them in when needed.
Planning your retirement
Pension rules give more choice than they once did: stopping work and drawing a pension are no longer tied together, and there are several ways to take an income. Specialist partners help you weigh the choices.
Your pension savings
An income for life
Bought from an insurer (an annuity). A set income, but once bought it cannot be changed.
Stay invested
Draw what you need, when you need it (drawdown). Flexible, but the value can fall and the money can run out.
Lump sums
Take cash as and when you want it, once your pension can be drawn. Most of each sum is usually taxed as income.
You can combine these and change your approach as retirement goes on. You also decide whether to take the part you can usually draw without tax.
The questions that shape your choice
Are you planning for yourself alone, or for a partner too? How often do you want an income, and might it need to change? How is your health, how do you feel about risk, and how much would you like to leave to your family?
If you are not ready to stop
Selling the business does not have to mean stopping work. You may want to work part-time or start something new, and a pension can usually be left untouched until you need it.
Taking too much at once
Taking large sums from a pension in one go can push up your tax, and some ways of drawing money reduce what you can pay in later. A specialist looks at how pensions, savings and investments work together.
Older pensions with promises built in
Some older workplace pensions pay an income set by your salary and years of service. That kind of promise is worth a lot, and giving it up by moving the pension elsewhere can be high risk, which is why specialist advice comes first.
How an introduction works
It starts with Simon. Tell him you would like help with financial planning, whether the sale is some way off, under way or complete.
Simon introduces you to a specialist partner who fits what you need. From there, the specialist partner takes it forward with you and any advice comes from them. If the sale is still to come or under way, Reads carries on with it.
Questions owners ask
Does Reads give financial advice?
No. Reads introduces you to specialist partners, and they give the advice. Our part is the sale itself. Questions about pensions, investments, protection or tax planning go to the specialist partner, who looks at your circumstances before advising.
Do I need to be selling now?
No. Planning can start well before a sale, which leaves more time to act on things such as pensions or how money leaves the business. It can also start after completion, once the proceeds are in.
Who are the specialist partners?
Experienced financial planners that Reads knows and trusts. Simon matches you with one who fits what you need, whether that is planning before the sale, the proceeds, retirement income or passing wealth on to your family.
Can a planner help with tax?
Tax is part of what a specialist looks at, mainly around pensions, investments, passing wealth on and how money leaves the business. The rules change and depend on your circumstances, so nothing can be promised in advance. Where your tax affairs are complex, a planner can bring in a tax specialist.
Does the planning stop once the plan is written?
Usually not. Circumstances, markets and the rules all move on, so specialist partners review the plan with you from time to time and adjust it. An introduction is the start of an ongoing relationship, if you want one.
When you are ready, start with Simon.
Tell Simon where you are with the sale, and he will introduce you to a specialist partner who fits.