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Building Wealth and having a Succession Plan

“Shirtsleeves to shirtsleeves in three generations”


It seems every culture has a variation on this old proverb about the rise and fall of family wealth and the fact it rarely transfers beyond the third generation.

In Australia and across cultural boundaries, it is a challenge facing many families especially as the Baby Boomers begin to retire. One of the reasons family businesses don’t flourish beyond second or third generations is because they don’t have a strong succession plan in place.

So, how do we preserve business wealth through generations?

To create a legacy, we explore two real-life scenarios and how to build and protect family wealth now and for the future.

External Business Sale

Scenario 1:

A client is selling their successful business through a business broker. They have engaged a broker with the right experience and communication skills to help them protect their family wealth.

The aim here is to think long term and build a business with maximum assets and value. So when the owners are ready to sell or step aside (out of choice or as an exit strategy should unforeseen circumstances arise) a profit can be made from the sale of the business. This ideally funds retirement and future financial plans or potentially passes on to nominated beneficiaries as a family legacy.

Internal Family Business Succession

Scenario 2:

Another client is looking to progressively establish his children in various businesses to create a family business legacy. He will act as a mentor to the next generation as they start their commercial life.

Funding for any additional businesses will be from internal family wealth and from external funding (banks).
Any businesses reviewed, through a process of due diligence, are those that have plenty of upside for extra development and profit, and also complement the qualifications and skills of each family member.
Many years of industry and business experience will also be taught and passed on to ensure skills and knowledge are part of this generational wealth transfer.


More than a Tax Accountant

As business tax accountants we can act as an external adviser to all parties to help ensure such a transition of wealth occurs successfully. We also advise business owners on the right path and the right people to speak to.
Here are some areas of discussion for either of the above scenarios.

  • Capital Gains Tax concessions on the sale of a business. There is a very generous concession that applies for businesses operating 15 years +.
  • Tax and accounting treatment of a business sale  
  • Sale of inventory, equipment and more – including the transfer of business name/s, employee entitlements, treatment of debtors and work in progress.
  • Plans for a good retirement and strong financial future including the role of superannuation, passive investments and building sustained business value for delivering a return now and in the future.


Find out how we can assist you build a business legacy and strong financial future for your family.