Article last updated 19 August 2026.
Most of the business owners I work with have spent the best part of a decade – sometimes two – working hard. By the time a sale is on the table, their business is their pension, their investment portfolio, and their financial plan, all in one.
This means that the moment of sale is also the moment of maximum financial risk – and the window to act is shorter than most people realise.
The challenge isn't just financial. It's psychological. For years, your identity, your income, and your sense of purpose have been tied to one thing. Suddenly, you're holding a number in your bank account that feels both enormous and uncertain. The decisions you make in the months before and after a sale can have a profound and lasting impact on how much of that wealth you actually keep – and what it does for your family in the long run.
Before we discuss investments, tax wrappers, or estate planning, I think it's worth starting with a more fundamental question:
What does success actually look like once the business has been sold?
For some, it means financial independence. For others, it means supporting children and grandchildren, reducing financial stress, backing charitable causes, or creating a lasting family legacy. Your answer shapes everything that follows.
The reality is that selling a business isn't a financial planning objective in itself. It's the event that provides the capital to achieve the objectives that really matter to you.
This article is intended for information purposes only and does not constitute personal financial or tax advice. Tax treatment depends on individual circumstances and may be subject to change. The value of investments can fall as well as rise, and you may get back less than you invest.
Many of the most valuable planning opportunities arise before the transaction completes, not afterwards.
In my experience, one of the biggest mistakes business owners make is waiting until heads of terms have been signed before seeking advice. By then, many planning opportunities have already gone.
Before a sale takes place, it's important to review whether Business Asset Disposal Relief (BADR) is available and whether the relevant qualifying conditions have been satisfied. It’s also worth considering whether shares could be gifted to a spouse or civil partner sufficiently in advance of the transaction.
Subject to advice and the relevant conditions being met, this may allow both spouses to use available reliefs and allowances, potentially reducing the family's overall capital gains tax (CGT) liability.
Following the October 2024 Budget, the main CGT rates increased to 18% and 24%. BADR was retained with its £1m lifetime limit unchanged, but the BADR rate itself (previously known as Entrepreneurs’ Relief) has been increased in stages – rising to 14% from 6 April 2025 and to 18% from 6 April 2026. This makes early, structured pre-sale planning more important than ever, as the differential between BADR and the main CGT rate has narrowed significantly.
One area that's frequently overlooked is the director's loan account (DLA). Many business owners have introduced personal capital into the business throughout its lifetime, whether to support growth, provide working capital, or help navigate difficult periods. As a result, it's not uncommon for the company to owe significant sums back to the shareholder.
Unlike salary, bonuses or dividends, the repayment of a genuine director's loan account generally represents the return of money that already belongs to that person. So, repayment often doesn't trigger the same income tax or dividend tax liabilities. For higher-rate and additional-rate taxpayers, the difference can be significant and often represents one of the most valuable areas of pre-sale planning.
Many entrepreneurs have focused on reinvesting profits back into their business and have understandably neglected their retirement planning. Before a transaction completes, there may be opportunities to make employer pension contributions, potentially benefiting from corporation tax relief while simultaneously moving wealth into one of the most tax-efficient environments available. Building pension wealth at this stage can have a meaningful long-term impact.
It's also worth noting that from 6 April 2027, unused pension funds will fall within the taxable estate for inheritance tax purposes. For business owners using pension contributions as a pre-sale planning tool, this changes the long-term picture – and makes it essential to consider pension wealth as part of a broader IHT strategy, rather than in isolation.
Learn more about the upcoming changes to IHT.
If you operate through corporate structures, it may also be appropriate to review whether the substantial shareholding exemption (SSE) is available. Where the relevant conditions are met, gains arising on the disposal of a qualifying subsidiary may be exempt from corporation tax. This may allow significant value to remain within the corporate structure for reinvestment, succession planning, or the creation of long-term family wealth rather than being received personally. This can be particularly valuable where the longer-term objective is to create multi-generational family wealth.
Broadly, this requires the selling company to have held at least 10% of the subsidiary for a continuous 12-month period within the six years prior to disposal. Further conditions apply, including requirements relating to the trading activities of the companies involved.
One of the most overlooked risks following a business sale is behavioural rather than financial.
Many entrepreneurs have spent decades taking risks. They're naturally optimistic, commercially minded and comfortable making decisions quickly. These characteristics are often the very reason they've been successful.
However, the mindset that helps build wealth isn't always the mindset that helps preserve it.
Following a sale, there can be a temptation to make quick decisions, pursue new opportunities or invest significant sums of money before a long-term plan has been established.
In most cases, I encourage people to take a step back.
Cash flow modelling can be invaluable at this stage. It allows you to understand your future expenditure requirements, retirement objectives, gifting ambitions and long-term family goals.
Many entrepreneurs are surprised to discover that they've got significantly more capital than they need to support their chosen lifestyle. Understanding what "enough" looks like will give you confidence and allow future decisions to be made from a position of strength rather than uncertainty.
Once the picture is clear, the focus shifts to structuring the proceeds in the most efficient way. This isn't about picking products from a list – it's about building a coherent strategy where each element has a specific role.
For most families, ISAs remain one of the most valuable planning tools available. Investments held within an ISA can grow free from income tax and CGT, while providing flexibility should funds be needed in the future.
It's worth noting that from 6 April 2027, the annual cash ISA allowance for those under 65 will reduce from £20,000 to £12,000. The overall ISA allowance remains £20,000, so the balance can still be invested in a stocks and shares ISA. Existing cash ISA balances are unaffected.
GIAs continue to play an important role, particularly where assets are structured appropriately between spouses. Effective use of allowances and tax bands can improve the overall efficiency of family wealth.
Offshore bonds can also be attractive if you don't require immediate access to your capital. In the right circumstances, they can provide tax deferral opportunities and form part of a broader succession planning strategy.
Find out more about how offshore bonds work and how they can support your planning.
For families looking to preserve wealth across generations, family investment companies have become increasingly popular. Many entrepreneurs find them intuitive because they mirror the corporate structures they've spent years operating in. These arrangements can allow families to retain control while gradually transferring wealth to children and grandchildren in a controlled and efficient manner.
Find out more about how Family Investment Companies can help with tax-efficient planning.
For many business owners, inheritance tax (IHT) becomes a far more significant issue once the business has been sold.
Before a sale, the value of a trading company may have benefited from Business Relief. Following the transaction, qualifying business assets are often converted into cash and investment portfolios, which may become fully exposed to inheritance tax. Families can move from having relatively little IHT exposure to facing a substantial liability almost overnight.
This is often the point where you might start considering lifetime gifting, trusts, FICs, and Business Relief-qualifying investments. While every family's different, the objective is generally the same: ensuring that more of the family's wealth passes to future generations rather than being lost to taxation. Business Relief investments are high risk and not right for everyone. We suggest speaking to your financial planner before making any decisions.
One concern I often hear isn't necessarily how much inheritance tax their family may pay. What they really want to know is whether their family will have enough when the time comes – without being forced to sell assets at the wrong moment.
This is where whole of life insurance can be particularly valuable. A whole of life policy is designed to provide a lump sum payout upon death, subject to the policy terms and payment of premiums. When written into trust, the proceeds can be paid outside of the estate and made available quickly to beneficiaries. For older business owners, whole of life insurance can be costly, but should still be considered.
From a practical perspective, this means that funds can be available to help cover an inheritance tax liability without requiring family members to sell investments, property or other assets at an inopportune time.
For many business owners who've spent a lifetime building wealth, whole of life insurance provides reassurance that the wealth they've created will ultimately benefit their loved ones rather than potentially being diminished by a tax liability or forced asset sales.
You should seek independent advice to determine whether this is appropriate for your circumstances.
Finally, retirement planning deserves more than an afterthought.
Many entrepreneurs have spent years focused on growing a business and relatively little time considering how they'll draw an income once they no longer receive profits from the company.
A business sale provides an opportunity to revisit pensions, investment portfolios and guaranteed income solutions.
An annuity is a financial product that converts a sum of money into a guaranteed income for life. While investment portfolios remain extremely important, with annuity rates significantly higher than they were five years ago, they can now provide a more attractive income than was previously available. They may provide a valuable source of guaranteed income for some people. Combined with pensions, ISAs and investment portfolios, they can help create a sustainable and resilient retirement strategy.
It’s important to note that annuity rates can change, so it’s important to speak to a financial adviser before making any decisions.
After spending years building a successful business, the focus shouldn't simply be on how much the business was sold for.
The real question is whether the wealth created through a lifetime of hard work is:
In my experience, the most successful business exits aren't defined by the sale price achieved, but by how effectively the proceeds are preserved, structured and passed on. After all, the business may have created the wealth, but the real challenge is ensuring that the wealth continues to benefit your family long after the sale has been completed. These are all things our advisers can work on with you.
If you're approaching a business sale – or have recently completed one – speak to our financial planners to find out how we can help.
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This material is for information only and does not constitute advice. Tax depends on individual circumstances and legislation and HMRC practice may change. Clients should take personal advice (and tax/legal advice where relevant) before acting. Investments and tax advantaged investments can fall as well as rise and may be illiquid; eligibility and relief depend on meeting conditions.
