After selling your business or moving on to a new chapter, managing the wealth you’ve built can feel overwhelming. The key is to make smart decisions that ensure your money works for you and helps secure your future. This article will explore strategies to help you manage your finances after a business exit, such as making your money grow more efficiently, reducing tax bills, and protecting wealth for your loved ones. We’ll discuss how tools like life insurance, business relief investments, and family investment companies can make a real difference.
“Can your money work harder for you?”:
Rethinking your investment strategy is one of the first steps after a business exit. With the right approach, your money can work harder for you, generating passive income, tax efficiencies, and long-term growth. Rather than keeping large sums in low-yield savings accounts, you can invest in opportunities that align with your financial goals. The key is balancing risk and reward, ensuring that your wealth is managed to support your lifestyle and legacy.
Using Life Insurance to Pay for an Inheritance Tax Liability
One of the challenges of passing on your wealth is the potential tax bill your family might face, known as Inheritance Tax (IHT). This tax can take a large portion of an estate, but life insurance can help. By setting up a life insurance policy specifically to cover this tax, your family won’t have to sell assets or worry about where the money will come from. The payout from the policy can go straight toward covering the IHT, helping to protect your legacy and ensuring your family can keep what you’ve worked hard to build.
How Investment into Business Relief Assets Could Reduce Your Estate
If you’re looking to reduce the tax your estate might face after your death, investing in certain business assets can help. Some specific rules allow investments in certain businesses to be exempt from Inheritance Tax, meaning they won’t count toward the total value of your estate. After selling your business, you can reinvest in these types of assets, which offer growth potential and provide a tax break. This way, you can protect more of your wealth for your heirs while continuing to make your money grow.
How Using a Family Investment Company Can Help Manage Wealth
A Family Investment Company (FIC) structure allows families to manage and grow wealth together. By putting assets like property, investments, or even business shares into an FIC, you can keep control while ensuring everyone in the family can benefit. FICs can help reduce taxes, particularly Inheritance Tax, and provide a clear plan for sharing and managing wealth. They offer a way to preserve and grow family wealth over generations, ensuring that future generations have the necessary resources while keeping things organized and structured.
If you would like to discuss anything mentioned in this blog, please get in touch with our Financial Planning team here
