The Benefits Of Holistic Financial Planning For Business Owners

The world of financial services and wealth management can be complicated. At Punter Southall Wealth we’re here to make sense of it for you and your clients. The following case study details how working collaboratively with their solicitor and accountant, we were able to guide one business owner to achieve their desired outcome. Not only for their retirement but for their loved ones as they considered, and eventually sold their business.

Samantha 58 and John 59 had run their family engineering business in the Midlands for 30 years. Samantha set the business up with an inheritance from her late father and had been planning on selling up by the time John was 65. They had three children, aged 22, 24 and 26. Over the years we had discussed succession planning and while they originally thought that their children would work in the business and eventually take over, in the end they all pursued their own careers leaving Samantha and John rethinking their plans, and their future.

Samantha and John’s personal investible wealth was £1,500,000, as follows:

Asset Invested Amount
Joint Core Taxed Account Discretionary Investment Manager £650,000
Samantha ISA Account Socially Responsible Investment £350,000
John ISA Account Socially Responsible Investment £250,000
Joint Cash   £200,000
John Premium Bonds   £   50,000


Additionally, they owned a property valued at £1,250,000 with no outstanding mortgage.

Digging deeper into their needs

Each year Samantha and John had been drawing income from the business of £190,000, which had supported their three children through private education and university, as well as their mortgage liabilities.

To help visualise what their future could look like post sale, our priority was to look at a budget plan with them. They felt that to live their required lifestyle, they would require an income of around £100,000 net each year.

During the pandemic in 2020, their net profit dropped, bringing a realisation that the value of their business, which they saw as their retirement pot, could easily diminish. They had already received an offer for £2,250,000 but they felt that the business was worth in the region of £4,000,000 and weren’t ready to sell at that point.

The next stage of the planning process was to calculate how their future would look if we based cashflow on a sale of £3,000,000 net of tax, and £100,000 net income per annum.

To start, we always explore whether clients are making the most of all the current tax allowances available to them. This means that when we get into the finer details of the cashflow modelling, we stand a better chance of providing a more tax-efficient path to required income levels, and the desired retirement outcome.

Most business owners have focused on Corporation Tax and Dividends during their business life. When they sell and retire, we can educate them on the world of personal taxation and allowances that they have available, to produce a good starting income without tax. The following table illustrates how this would work for Samantha and John.

  Samantha John
ISA – 3% yield £350,000 £10,500  
ISA – 3% yield £250,000   £7,500
Dividend income from core taxed account £2,000 £2,000
Personal Allowance (Tax Year 2021/2022) £12,570 £12,570
Personal Savings Allowance (Tax year 2021/2022) £1,000 £1,000
Capital Gains Tax (Tax year 2021/2022) Annual Exempt Amount £12,300 £12,300
Total £38,370 £35,370


The ability to draw nearly three quarters of their required £100,000 income tax-free, minimises the pressure on their capital.    This meant that, even factoring in a market crash just after they had retired and started to draw their income, our full cashflow illustration demonstrated that they would not run out of money if they both lived until they were 100. Market shocks are incorporated into the cashflow modelling approach, both individual shocks and general stock market movements witnessed from 1998 to 2020. This means pragmatism and “defensive financial engineering” can be fully incorporated into the approach.

To provide clients with holistic financial planning that stretches their business journey, we implement several measures to protect Samantha and John prior to considering a sale, addressing a range of concerns that are specific to business owners:

  • Who will run the business if we die?
  • Who inherits if we die?
  • How do we extract capital efficiently?
  • Will the buyer require us to stay on in a consultancy capacity?
  • Who will run the business if we are ill?
  • Who will run the business if we can’t?

These conversations need joined-up discussions with a solicitor and accountant to ensure that the appropriate succession plans are in place. Working together we ensured that:

  • they had a business will in place leaving their shares to their children.
  • their Articles of Association were updated.
  • they had a cross option agreement set up.
  • their accountant had discussed all taxes for exiting the business.

For planning specific purposes, Life and Critical illness cover was put in place and various trusts were established to ensure that all eventualities could be met.

This covered many of the ‘what if’s’ along the way and Samantha and John were now ready for sale!

Business Sale

In April 2021, by collaborating with their solicitor and accountant, we helped them prepare their business for a successful sale of £3,550,000 net of all fees and tax.

We used our cashflow models to demonstrate that they could readily afford to gift part of the proceeds without impacting their long-term financial security.  The funds were invested after they had made an initial outright gift to each child of £100,000.

Going forward, and by carrying out annual reviews, their Inheritance Tax planning will now form a major part of our ongoing advice service, maintaining income and looking at further gifting, trusts, Business Relief planning and possibly life cover.

Working together

We can’t achieve any of the above without collaborating with solicitors and other professionals and utilising their specialist services. Working together as a team supporting business clients, we can help ensure the best outcome is achieved for them.

Financial Planning Our trusted partners
·         Cashflow Planning

·         Inheritance Tax Planning

·         Director Shareholder Protection

·         Keyman Insurance

·         Relevant Life Cover

·         Directors Loan Protection

·         Critical Illness Cover

·         Replacement business relief plans

·         Life cover in trust

·         Planning tax-efficient income

·         Death nominations into Pensions

·         Lasting Powers of Attorney

·         Wills

·         Articles

·         Cross Option Agreements

·         Employment contracts

·         Two-year planning for Business Asset Disposal Relief and Substantial Shareholder Planning Exemption

·         Tax-planning for exit

·         Trusts

·         Family and Personal Investment Companies

·         Finance

·         Excess cash in the business


To learn more about how Punter Southall Wealth works with, and supports Private Client professionals and their clients in the Midlands, please contact Lorraine Denton, Chartered Financial Planner at or 0121 230 1915

The value of investments and the income from them can fall as well as rise. An investor may not get back the amount of money that they invest. Past performance is not a guide to future performance. We do not provide legal or tax advice. Please consult any appointed advisers on the possible tax, legal and other consequences of you holding any of the investments contained in this article. Unless indicated otherwise, comment and opinion in this article is based on HMRC’s tax regulations for 2021/22 tax year and tax treatment depends on the individual’s circumstances and may be subject to change in the future.