Preparing for a Dream Retirement: How an IT Business Owner Successfully Sold Their Business

About Client

Our client works in the IT industry. Their business had a turnover of $7m and had 20 staff. Our client had been in business for many years and had planned on making some significant changes to their business in the next few years.

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The Challenge

The client's previous accountant provided only year-end financial reporting, which left our client feeling the need for more proactive advice to better prepare and capitalise on ongoing developments in business.

The Solution

We initiated a comprehensive business health check, needs analysis, and structural review. This process revealed that two companies had been established for our client many years ago, and this arrangement had not been revisited to confirm its continued suitability. 

Considering the client’s intention to sell one of the businesses in the coming years, we recommended a restructuring of both companies. This not only provided enhanced asset protection but also simplified and streamlined the group, ultimately reducing the capital gains tax liability when the sale eventually took place. 

Furthermore, we identified issues with the class of shares issued to the company’s shareholders, some of whom were also employees. These issues posed a significant risk to the business. We offered advice on the necessary steps to rectify these problems and engaged in discussions regarding succession planning with the client, enabling the implementation of a strategy to facilitate others stepping into leadership and ownership roles when required. 

We conducted risk and estate planning to safeguard his assets and prepare for the future. Multiple avenues for legitimate tax minimisation were identified, and we outlined a schedule to clarify the amount of tax due and its likely due dates. 

A step-by-step strategy was documented, defining responsibilities and deadlines for all required actions. Finally, we completed all compliance work, including end-of-year accounts and tax returns. 

The Results

Our comprehensive business review and strategic planning enabled the client to prepare for the eventual sale of the business. Thanks to our meticulous planning, we accessed the CGT Small Business Concessions, resulting in savings of over one million dollars in tax. As a result, our client is well on their way to a successful retirement, with ample funds to live comfortably and indulge in their passions for boats and cars. 

You can rely on our tax experts to provide the guidance you need for both Australian and international tax matters. With a proactive approach to your tax affairs, we assist in implementing effective and optimised tax strategies right from the early stages of your business.

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