When you’ve spent decades building and running a business, you need advice you can trust when the time comes to move on.

Our clients, a husband and wife who owned and ran a successful dental practice, came to us for guidance and support as they were considering selling the business.

“My clients were keen to gain a clearer understanding of what life might look like after the sale and to take advantage of our expert guidance before, during and after the sale,” says Managing Director Douglas McCrea. “Having built up significant assets, and with two teenage children at home, they needed holistic financial planning advice to support them not only with selling the dental practice, but by managing their tax liabilities and long-term retirement and estate planning. We appreciate after many years working and building a business, it can be daunting preparing for what will hopefully be a long and enjoyable retirement.”

With a plan to sell the business within two to three years, our first meetings focused on turning the pieces of the jigsaw over to see exactly where they stood, what assets they had and also to discuss what their plans and hopes were for both them and their children. Establishing the couple’s objectives and identifying their requirements including using the crystal ball to look into the future for when the business was sold and what life might be like then during their life of leisure.

Our first step was to take time to understand the family’s current lifestyle and what their plans were for after the business sale, including how long they would be expected to work on.

“Getting to know our clients is crucial in allowing us to identify how we can help them realise their financial goals,” explains Douglas. “We were also able to establish our clients priorities both in terms of what they were going to enjoy spending money on as well as agreeing the types of investments they were comfortable with”.

Following our introductory meetings and having assisted the couple in rounding up all the information we needed to complete that part of the jigsaw, we prepared a detailed recommendation report outlining our proposals for the short, medium and long-term, explaining what action was required to move onto the next stages. Throughout the process, we worked closely with their accountant and also recommended solicitors to help with updating the families Wills and Power of Attorney.

We provided expert advice on how to best prepare for and execute the sale of the business, and how to structure the families various assets after the sale.

Detailed analysis of the couple’s pension arrangements also identified that one partner had significantly under-used their annual pension allowances. As preparations to sell the business continued, we identified the opportunity to make use of those allowances through additional contributions from both the company and the individual, which had the added benefit of reducing the company’s Corporation Tax liability while boosting the couple’s retirement savings. Our advice on fund switching also allowed the couple to take advantage of more flexible drawdown options in support of their early retirement and income needs in the future.   

The couple also owned a rental property; however we established the return on this investment was underperforming due to the tax payable on the income generated along with the ongoing costs. We helped plan a sale of the property releasing additional funds for investment while making best use of their Capital Gains Tax allowances.

“We are fortunate as due to having substantial funds under management, we have been able to negotiate preferential terms for our clients and offer a wide range of options more suited to their investment risk profile. Working with our clients to establish their risk profile, we found that they were comfortable with more risk than they had been taking, allowing us to recommend the investment of funds which had been held until that point in high street savings accounts.”

Our clients’ plan is to achieve capital growth on their investments to provide a  tax-free income in retirement. With one child under the age of 18 we also established a Bare Trust which in due course we can over a number of years gradually move to an Investment ISA.

Working in conjunction with Jonathan Campbell, our Pension and Investment Specialist, we guided the couple through buying their commercial property, which was owned personally by the couple, into a Self-Invested Personal Pension (SIPP). This now means the purchasers of the dental business pay rent to the clients SIPP, providing a tax-efficient method of growing the pension.

Our clients sold their business just over two years after first engaging with us, and we continue to offer advice and assistance now they are nearing the end of their buy out period and will soon be stopping work fully. With the significant sums from the sale of the business, we are providing expert guidance on various investment options and will soon be looking for a combination of tax efficient income as well as capital growth.

‘’From ensuring over a number of meetings that we fully completed their financial and personal jigsaw this allowed us to discuss and agree on personalised recommendations which continue to be reviewed on a regular basis. We have been there for our clients and they have been delighted with both our service and the performance of their investments with us to date. It’s gratifying to see the real impact and benefit our advice can have on the daily lives and futures of our clients, and we look forward to working with this couple as they move towards a well-earned retirement.”  

McCrea Financial Services is Authorised and Regulated by the Financial Conduct Authority.