Many successful business owners spend years building a business that they are rightfully proud of and, in doing, so they accumulate significant value in the business and cash extraction becomes a concern. The question often arises, as to how best they can extract this value for their own personal enjoyment.
Cash can be extracted through dividends or a salary, but these mechanisms are punitive from an income tax perspective. Likewise, while a director’s loan is another means of cash extraction, this too has drawbacks, not least the fact that it has to be repaid and is subject to taxation and restrictions under company law.
Having invested their lives growing a business, many owners often leave it too late to plan for the future, limiting their exit choices and, ultimately, failing to reap adequate rewards for the hours worked, energy burned and risks taken. A last-minute share sale or unplanned or forced retirement is not the way a successful business person should hope to exit their business.
Our accountants can structure a cash-extraction mechanism that makes maximum use of retirement and entrepreneurial tax reliefs and is compliant with company law
For more information and to discuss your client’s cash-extraction needs, email us or call us today on 053-9100000. We look forward to working with your practice.
How We Can Help
Our accountants at OmniPro apply their unique blend of taxation and company law expertise to advise clients on the cash-extraction mechanism that best suits their needs, while making makes maximum use of retirement and entrepreneurial tax reliefs in compliance with legislation.
We can work with you to help your clients develop their exit plans in good time and, where desired, structure an exit that is beneficial for both the person leaving the business and those remaining.
A well-planned exit strategy is key to efficient cash extraction from a business. Depending on the objectives of the business owner, potential mechanisms include: