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According to a new survey, two-thirds of wealthy business owners have accelerated plans to retire or sell their businesses during the Covid pandemic, reflecting the new psychological and financial situation of the business.
Survey from Clarfeld Citizens Private Wealth, 66% of high net worth business owners said they have indicated that the pandemic has advanced plans to sell or retire its business.
Half plan to sell their business as a result of a pandemic.
The survey covers 150 business owners with net worth of $ 2 million or more and investable assets of $ 5 million or more. This was done online in July on behalf of Ipsos. KralfeldProvides banking and wealth management services to the wealthy.
Wealthy business owners have decided to cut back on their jobs and businesses as they become more focused on their time and family during the pandemic, Mr. Krafeld said.
“They have reset their priorities,” said Joanie Bosek, director and chief fiduciary officer of Klarfeld’s trust services. “Their mortality rates have become more realistic.”
Tax uncertainty and the increased likelihood of tax increases for the wealthy also put pressure on business owners to sell. President Joe Biden, the Senate, and the House of Representatives have all proposed higher capital gains tax rates and the possibility of changing inheritance taxes, which will increase the tax on business sales. Parliamentary Biden and the Democratic Party are also proposing higher income tax rates for high-income earners.
“They are aware that for successful people, it’s time to monetize their business,” Bosek said.
Most (88%) plan to leave the business to their spouse, children, grandchildren and other family members.
The threat of pandemics and tax increases also made business owners think about moving. Two-thirds of the wealthy business owners surveyed say they relocated their businesses during a pandemic. Main reason: Taxes, 34% are moving to low tax states. The second reason was to get closer to the family, and the third reason was remote work, which provided a more flexible location.
Of course, not all businesses can be relocated, and Clarfeld’s research focused on services and technology areas that are easier to relocate. However, three-quarters of business owners surveyed will physically move their businesses over the next three to five years, especially if taxes rise and high-tax states such as California, New York, and New Jersey become less attractive. I think there is.
“Remote work easily led to’where do you want to live?’,” Bosek said. “I think this trend will continue as taxes rise and the economy is further affected.”
66% of wealthy business owners plan to sell or retire early due to a Covid pandemic.
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