Brabners’ David Houghton on the retirement options if you are the boss
WITH an anticipated Capital Gains tax hike, we are expecting to see a surge in business owners wishing to retire in 2010.
But many are concerned about completely removing their expertise without safeguarding their assets. And while traditional options, such as a management buyout or sale to a private equity buyer are becoming potential options once again, these remain difficult.
As a result, alternative solutions for retirement such as cash out transactions or a partial exit are increasingly being considered.
These types of structured exit allow owners to bank wealth now, while maintaining some day-to-day involvement to help reassure funders – but are not without complications.
Clearly defined timelines and responsibilities for both parties, outlined in contracts and agreements, are vital and professional advisers need to be involved at the earliest stage to encourage negotiations to progress smoothly and ensure tax and legal implications are understood.
The challenges presented by the downturn prompted a burst of creativity from the region’s businesses – by taking an equally flexible approach to retirement, owner managers can develop an individual exit strategy that protects the legacy their hard work has created.
