Superannuation may not be the first thing that comes to mind when planning to sell your business and retire.

As business owners, you may have planned on handing over the business to family members or selling on the open market.

There are two key aspects of preparing your transition out of your business:

• planned succession, which chiefly concerns those of you beginning to think about retirement
• unplanned succession, due to events such as death, disablement and trauma which should concern all business owners regardless of age

The chief concerns for owners in both types of succession planning are receiving fair value for the business you have built up and the smooth continuation of the business for the ongoing/new owners.

Where does superannuation fit into the business succession picture?

One of the big implications of the changes to super that happened in July 2007 that may be of particular interest to business owners is that it is now more tax efficient to hold a greater amount of insurance cover in super, including cover for unplanned business succession as well as personal and family needs.

Not only can insurance premiums be funded by fully tax deductible super contributions (a 75% deduction applied for the self-employed and partners prior to July 2007), but the 15% tax that normally applies to deductible contributions can be offset by a tax deduction for the policy premiums inside the fund.

This means that super is now the obvious choice for insurance ownership and business owners should maximise this opportunity.

Nick Davey and Aequis Pty Ltd are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 an Australian Financial Services Licensee.

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.