Get free updates - subscribe to our monthly newsletter Subscribe
Family owned food retail company - business owned and operated by 2 brothers
• Brother A wished to retire from the business and take his value out in a tax efficient manner
• Brother B did not want to retire and wanted to continue the business
• The remaining Brother B did not have personal funds to buy him out so needed to raise funds through the business
• Client knew what the end objective was but did not have a plan to get there
• Differing opinions between the brothers on the value of the business and the ideal timescale for Brother A to retire
What we did:
• Understood the individual brothers personal objectives and concerns, in conjunction with their personal financial adviser
• Undertook a valuation of the business and assessed the feasibility of borrowing funding externally using our contacts in the banking sector . We were able to test the feasibility of a deal at an early stage.
• Working with tax consultants and the personal financial adviser developed a plan and transaction structure to allow one brother to exit the business in a tax efficient manner. Minimising the capital gains tax charges on him and on the company, being mindful of not over burdening the company with debt and ensuring the retiring brother received the required level of capital and income in his retirement
• Co ordinated the process in conjunction with 2 sets of solicitors our role as “lead adviser” ensured the transaction progressed as quickly as possible and any hurdles or issues were resolved expediently.
• The company borrowed sufficient funds from a bank to buy back Brother A’s shares and to pay a substantial pension payment to him.
• Brother A retired as planned with minimal tax payable on his capital sum
• Brother B now owns 100% of the company and is developing and growing the business with his wife as a fellow director.
Alison Watts is Corporate Finance Partner at our Fairview House office in Carlisle and specialises in acquisitions and disposals.
t: 01228 690200
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW