Almost half of SME owners plan to pass on their business to their children, new research from Close Brothers Asset Management reveals.
The survey found that 63 per cent of owners planned to pass their business onto a family member, with 48 per cent planning on their children being the recipients and more than one in ten planning on handing over to their spouse.
The research found a sectoral variation; those in the transport industry were most likely to plan on handing the business to their children (75 per cent), whilst wholesalers and distributors were much less likely to (43 per cent).
Despite these aspirations, just one in 10 have thought about how to plan for their succession,
Patrick Haines, regional head of advice at Close Brothers, said: “SMEs are the building blocks of the economy, and their longevity is crucial. Many are already multi-generation family businesses, but whether a company is newly formed, or centuries old, it’s encouraging that the majority of SME owners plan to protect their business and its heritage, preparing children or family members to take over at the helm.
“We already know that only a third of family business make it to the second generation and succession can be a complicated process. There are tax implications of passing businesses to the next generation that business owners need to be aware of – whether capital gains tax, or inheritance tax – and beneficial reliefs like entrepreneur’s relief or CGT Hold-over. ”
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