As a business owner, you’ve probably found the last 3 months all-absorbing. Managing the significant challenges your business has faced takes time. And a lot of it.
Of course, you’ve still got plenty to think about business-wise, but are you taking enough time to think about yourself?
Start talking about you
Recent events have made many of us focus more than usual on our own mortality. Are we spending our time on the right things? Have we done all we can to protect the wealth we’ve built up and leave a legacy?
Now may be the time to self-review and put plans in place. Your priorities will be unique to you, of course, but it could be worth considering the following:
- Are the assets that you own, directly or in your business, in the best place considering your plans? Are your assets protected from risks? Now may be a good time to reflect on ownership structure.
- What about medium and longer-term succession? Do you have a plan? Again, it’s perhaps a good time to think through the options and decide whether it’s appropriate to take any actions now.
- Thoughts on succession will be individual to all of us, but the importance of being reassured your affairs are in order is universal. If something were to happen to you or a loved one, would everything be in hand from a financial perspective?
- You may have been pulled back into the operational side of your business in recent months, and your employees will have faced their own challenges too. To give you the time to think about the strategy for the business and yourself, the support and focus of your second-tier management will be key. Do you need to do anything further to motivate and reward your key employees? Cash may be tight but there may be alternatives like an equity incentive or similar that can be implemented with little cost, right now.
Tax often plays a part
Whilst never a driver, tax considerations will often play a key part in any personal planning. The government support packages have been a lifeline for many individuals and businesses, however, the impact on public finances will need to be balanced.
That could mean tax cuts in the short term to stimulate the economy, but it’s likely that tax rises are on the horizon. Amongst many possible changes, we could see increases to income tax and capital gains tax, and a possible reform of wealth taxes – with speculation suggesting the latter may involve the loss or reduction of the exemption from inheritance tax that is currently available for some business assets (which we covered here).
Because possible tax changes could influence your thoughts on the appropriate ownership of your assets and succession, or the timing of any actions you may take, they should always be considered in the context of your plans.
To start thinking about yourself and talk through what’s on your mind, get in touch with your usual tax contact, or Krista Fox at email@example.com.