B
bigfrankt2
Guest
Hi Guys just want to know what you think of the following scenario ie. what are the main areas I should look at in an attempt to advise this client
Anne and Barry, owned a pharmacy. They had set up the business from scratch and incorporated it seventeen years ago. They were 50:50 shareholders, directors and employees of the company. They were both 61 and had four adult children. Barry had a small occupational pension scheme through a major insurance company.
Barry and Anne were looking to sell their business and had reached an agreement with a pharmacy chain to acquire it. The purchaser had done its due diligence and was prepared to pay €5 million for the shares in the company. However, the company had retained profits of approximately €2 million and the purchaser had indicated that it would be happy for Barry and Anne to withdraw these profits in return for a corresponding reduction in the purchase price.
Anne and Barrys' Objectives
Barry and Anne wanted to:
▪[FONT="] [/FONT]Withdraw the retained profits in the most tax-efficient manner.
▪[FONT="] [/FONT]After taking €500,000 for their immediate use, use the balance of the after-tax retained profits to put in place an investment fund that would allow them to invest in a wide range of assets, including property and equities.
▪[FONT="] [/FONT]Structure the sale of their business in the most tax efficient way.
▪[FONT="] [/FONT]Make a gift of approximately €2 million of the proceeds to their children, since the balance of the proceeds net of tax would, along with any investment fund and their existing assets, be sufficient to secure their own financial freedom/independence.
Any advice would be most appreciated guys thank you so much in advance
Anne and Barry, owned a pharmacy. They had set up the business from scratch and incorporated it seventeen years ago. They were 50:50 shareholders, directors and employees of the company. They were both 61 and had four adult children. Barry had a small occupational pension scheme through a major insurance company.
Barry and Anne were looking to sell their business and had reached an agreement with a pharmacy chain to acquire it. The purchaser had done its due diligence and was prepared to pay €5 million for the shares in the company. However, the company had retained profits of approximately €2 million and the purchaser had indicated that it would be happy for Barry and Anne to withdraw these profits in return for a corresponding reduction in the purchase price.
Anne and Barrys' Objectives
Barry and Anne wanted to:
▪[FONT="] [/FONT]Withdraw the retained profits in the most tax-efficient manner.
▪[FONT="] [/FONT]After taking €500,000 for their immediate use, use the balance of the after-tax retained profits to put in place an investment fund that would allow them to invest in a wide range of assets, including property and equities.
▪[FONT="] [/FONT]Structure the sale of their business in the most tax efficient way.
▪[FONT="] [/FONT]Make a gift of approximately €2 million of the proceeds to their children, since the balance of the proceeds net of tax would, along with any investment fund and their existing assets, be sufficient to secure their own financial freedom/independence.
Any advice would be most appreciated guys thank you so much in advance