- What are my goals in relation to management, income, control and ownership of the business now, in 5 years, in 10 years, longer?
- Are my kids interested and capable of running the business? Would I employ them as a senior executive if they weren’t family? How do I manage a skills gap now?
- How do I make provision for the kids who want to ‘cash-out’ without putting the business at risk?
- How will decisions in the business be made by the family when I am gone? Does my business have an effective governance framework to avoid family disputes impacting the efficient running of the business?
- How do I draw on the business value in future to support my exit without crystallising a big tax liability?
- What are my philanthropic objectives?
Interestingly, many groups we have worked with owned their businesses from before the introduction of capital gains tax (CGT). This allows great flexibility in getting governance and succession planning right in terms of:
- managing pre CGT goodwill and Australian Taxation Office (ATO) rulings
- new business structures
- stamp duty and goods and services tax (GST) planning
- operational strategic advice.
If you have business owners with pre CGT businesses who are also looking at planning their succession, please call me to discuss our experience in getting great outcomes of this very significant and wealthy sector.
In working through these issues earlier you can develop ownership and investment structures that build wealth now for the family to manage the eventual succession to the next generation without significant tax costs or damage to the business.