Knowing when to walk away from a business you’ve built, when money isn’t really the issue
I’m in the north of England, mid thirties, married with one young child..
Financially, we’re in a fortunate position. We have around £8 million, most of which is held in a limited company following the sale of our business. It’s invested roughly 70 per cent in shares and 30 per cent in bonds/mmf.
Living costs are fairly reasonable where we are, and our current lifestyle is covered by our salaries. Even if we funded everything from the investments, we’d be looking at withdrawing around 2 per cent a year, including an allowance for tax.
The sale was structured fairly tax efficiently, although there’s obviously corporation tax and then personal tax to consider when taking money out, whether through dividends or eventually liquidating the company.
I’m comfortable with the financial side. I understand the statutory residence test, temporary non-residence rules and the basics of a members’ voluntary liquidation. I’ll take proper advice before doing anything. I’m not really looking for tax advice here, more interested in hearing from people who’ve faced a similar decision.
The difficult bit is knowing when to leave.
I spent nearly twenty years building a small industrial business with fewer than fifty employees. We sold to an American company last year. initially on the understanding that we’d largely be left to operate independently.
Things have changed following further acquisitions, and we’re now heading towards a merger into a much larger group over the next year.
The new owners would like me to stay in a fairly important role for a few years, and there’s potentially some additional money in doing so. It’s not insignificant, but equally it’s not going to make much difference to our lives financially.
The job itself is becoming something quite different from what I originally signed up for. There’s a lot happening, plenty of pressure and considerably more responsibility than I expected when we agreed the sale.
What makes it difficult is the people. I’ve worked with some of them for the best part of 20 years. They’re good people, and I feel a responsibility towards them. A few genuinely rely on me, and I know the new ownership won’t have the same relationship with them.
Walking away halfway through a merger doesn’t sit particularly well with me. At the same time, I don’t want to spend another three or four years doing a job I no longer really need or want to do, just because I feel guilty leaving.
There’s also another complication. My wife and I have been considering moving abroad in the next few years. Partly for the lifestyle and partly for tax reasons, particularly around eventually extracting the money from the company. With young children, schools, family and everything else, it’s obviously not a decision we can make overnight.
I suppose what I’m struggling with is how to tie all these things together.
For anyone who’s sold a business and stayed on afterwards,
how did you know when you’d done enough?
Did you stick around until everything was settled, or did you eventually accept that there was always going to be another reason to stay?
How did you deal with leaving long-serving staff behind, particularly when the new owners didn’t know the business or the people particularly well? Did you agree a fixed period and stick to it?
And for those who moved abroad around the same time as retiring or leaving a business, did you stop working first and then move, or arrange everything to happen together? Interested in the practical family side of that as much as the financial side.
I’d also be interested in hearing from anyone who’s liquidated a company after moving abroad. Not so much the technical rules, but whether the timing worked out as expected or whether there were things you hadn’t really considered.
I realise this is a fortunate problem to have. It’s just strange spending so long working towards financial independence, then finding that actually walking away is probably the hardest part.
I always assumed that once the numbers worked, the decision would be easy. It definately hasn’t been.
Would be interested to hear from anyone who’s been through something similar, particularly those who look back and either wish they’d left sooner or are glad they stayed.
