Planning to exit a business in the next 3-5 years? Stick to the plan

In part two of our three-part series, Corporate Finance partner Linzi Wilson considers the impact of the Autumn 2024 Budget on business owners planning to exit a business in the next three to five years. Linzi reflects on why changes to Capital Gains Tax and Business Asset Disposal Relief might not be a good reason to rush into a quicker sale.

With Capital Gains Tax (CGT) increased and Business Asset Disposal Relief (BADR) increasing in April 2025, business owners may feel a sense of urgency to sell sooner rather than later. In some cases – as outlined in part 1 of our Exit Planning and the Autumn Budget series – that may be the right choice, but it is not for everyone. While the CGT and BADR changes might tempt you to exit earlier than planned, there are several reasons not to sell early.

Are short-term tax gains worth more than the upper hand in negotiations?

Bringing forward your plan to exit a business may help you realise tax benefits in the short to medium term. However, expediting the process could impact the balance of negotiating power.

Savvy buyers will anticipate a glut of UK business owners entering the market soon who feel under pressure to sell — offering more buying options and greater influence over everything from the terms of sale to the valuation of your business. In that context, is saving a few percent on BADR worth it?

Effective exit planning helps address business problems

When we work with business owners on Exit planning, a significant part of the process involves preparing the business for sale. Once an interested party begins their due diligence, any underlying issues will come into focus. A methodical approach to addressing such issues helps to convert interest to intention and may increase the sale price.

By rushing to a quicker sale – either because of the Autumn Budget or the anticipation of future changes to taxation – the time available to address those weaknesses reduces dramatically. Ultimately, when your expected exit is in the medium-term, prioritising a quicker sale over thorough exit planning and preparation is risky.

Planning to Exit a business: could you rush into a buyers’ market?

If external factors are encouraging you to bring forward your business exit, it is important to consider whether market conditions are optimal. Cycles are unique to every industry and sector and often make the difference between a buyers’ market and a sellers’ market.

Business owners should avoid being blinkered by changes to the tax regime if market conditions are not right. The gains from available tax reliefs could be dwarfed by a reduced overall valuation of the business.

Planning to exit a business in the next 3-5 years: stick with the plan

For many business owners looking to exit in the next three to five years, senior management will already be part of the exit and succession planning process. Their timeline is wedded to that of the business owner. An expedited timeline, therefore, has the potential to unsettle and demotivate.

Terms of sale often require strong financial and operational performance beyond the transfer of ownership. An unsettled workforce, low morale or resignations can negatively impact performance. Ultimately, they can compromise deferred payments or share options, diminishing the profit extraction from your exit.  

For business owners looking to exit in the next three to five years, the evidence suggests compressing that timeframe may not be beneficial. If you have an exit strategy in place and are happy with the anticipated outcomes, there are convincing arguments to stay the course and avoid the temptation to cash in prematurely.

Are you planning to exit a business? 

Consilium Chartered Accountants provides comprehensive services for business owners and entrepreneurs planning to exit a business. From Exit planning advice and Due diligence to Business valuations and help finding the right buyer, we are your trusted partner.

To arrange a confidential discussion, contact Linzi or learn more about our Exit planning, Succession planning and Due Diligence services. 

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