The Importance of a Pre- Sale “MOT”
Last Friday, I had a Teams meeting with two IFAs who, after much deliberation, have decided to retire. The crux of our conversation was whether there would be enough time to facilitate a sale before the increase in Business Asset Disposal Relief taxation to 14% on 6 April 2025. My answer was straightforward: it’s achievable provided everything is in order.
This discussion highlighted a few key points that are worth considering for other IFAs:
- Aligning Retirement Goals Early
The two partners, despite being amicable and having worked together for over 25 years, had never seriously discussed their retirement plans. As a result, although one initially raised the idea of retiring last May, it has taken several months to reach the current stage. The recent October budget announcements have only added urgency to the situation.
It’s a valuable reminder that business partners often have vastly different private lives and aspirations. That’s why it’s beneficial, even early in a partnership, to discuss what circumstances might trigger the sale of the business.
- The Importance of a Pre-Sale “MOT”
Deciding to sell is just one piece of the puzzle—determining who will buy the business is another, and it can involve family members or employees within the organisation. However, my key point is this: while a quick sale can often be arranged if everything is in order, the reality is that preparing the business in advance makes the process far smoother.
This is why we recommend a pre-sale “MOT” for anyone planning to retire within the next five years. A thorough review can help identify and resolve potential issues in advance, ensuring the business is in the best possible condition when the time comes. While you can carry out this review yourself, independent assistance often uncovers issues that might otherwise go unnoticed.
- Avoiding Pitfalls at the Sale Stage
Unfortunately, issues at the sale stage can lead to unwanted delays or reductions in the offer price. Under such pressure, sellers may feel compelled to accept revised terms that are less favourable. By addressing potential challenges early, a pre-sale “MOT” can mitigate these risks and provide greater peace of mind.
As the leading independent consultants to the retail financial services industry, confidentiality is central to our work. Whether you’re navigating regulatory changes, exploring acquisitions or sales, or simply planning ahead, we’re here to provide expert guidance.
Please do get in touch to discuss your business needs. As always, your first meeting with us is at our expense.