How should you be planning for your retirement?

Every week experts from FPM Accountants answer your tax and personal finance questions

personal finance
It is important to understand how your retirement would be funded as your personal wealth planning and business succession planning will go hand in hand (AndreyPopov/Getty Images/iStockphoto)

QUESTION: I have built up considerable wealth from my successful furniture company over the years. As I approach my 60s, I am looking towards the future and wondering how best to plan for retirement. How best can my husband and I plan our affairs so we don’t have to worry about tax?

ANSWER: Looking ahead and planning for the future is always recommended as it can often allow you to arrange your affairs in a tax efficient manner as well as give you piece of mind.

When considering retirement, the starting position is to review your disposable income requirements going forward, what type of lifestyle do you plan to have during retirement? It is important to understand how your retirement would be funded as your personal wealth planning and business succession planning will go hand in hand.

The first two considerations in any succession plan would generally be, what is the value of my business and who would be willing to acquire it from me? The value of your business depends on a number of factors and it may be that you may need to implement a strategy to prepare it for sale. The second point to consider is, would there be a willing buyer, this could be a management team already working in the business, a family member(s) or an external third party such as a competitor?

If there is a willing buyer, consideration needs to be given to how the sale could be structured to minimise the associated tax implications. If the business is being passed to the next generation, maybe as a gift, this will also give rise to a number of tax issues. Generally, on the disposal or gift of any business, exposure to inheritance tax, capital gains tax, income tax, VAT and stamp duty needs to be reviewed.

If the business can’t be sold (for various reasons), one exit route may be a member’s voluntary liquidation. As with all other exit strategies, timing of this is important. Again, there are also a number of legal, commercial and taxation matters requiring a review.

Another point you may want to build into your plans is inheritance planning, especially if you expect to have surplus wealth required for your retirement plans and want to minimise inheritance tax when the next generation inherits.

One such way to minimise inheritance tax without giving away control too early is the use of trusts, though specialist advice should be sought when setting up trusts.

Feargal McCormack
Feargal McCormack

Once you are comfortable you have a clear succession plan for your exit from the business and you have decided on how you would like your estate distributed, we would recommend making your intentions clear with all relevant parties.

The importance of a family meeting to give clarity to all concerned and underpinning your wishes cannot be understated. We have found that this avoids family disputes in the future.

It is important that you work with your trusted business advisers to help make sure you have thought out each scenario and plan for any tax implications, as well as put steps in motion to work towards your end goal of a worry-free retirement.

  • Feargal McCormack ( is managing partner at FPM Accountants Ltd ( The advice in this column is specific to the facts surrounding the question posed. Neither the Irish News nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.