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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.
According to a survey by Clarfeld Citizens Private Wealth, 66% of HNWI business owners say the pandemic has accelerated plans to sell or retire their businesses.
Half plan to sell their business as a result of a pandemic.
The survey covers 150 business owners with net worth of at least $ 2 million and investable assets of $ 5 million or more. This was done online in July by Ipsos on behalf of Clarfeld, which provides banking and wealth management services to the wealthy.
Wealthy business owners have become more focused on their time and family during the pandemic and have decided to withdraw their jobs and businesses, 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 all proposed the possibility of raising capital gains and changing inheritance taxes. This will increase the tax on the sale of the business. 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 people plan to hand over their business to their families. Eighty-eight percent of those surveyed said they 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-related areas that are easier to relocate. However, three-quarters of the business owners surveyed will physically move their businesses over the next three to five years, especially if taxes are raised and high-tax states such as California, New York, and New Jersey become less attractive. I think it 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.”
Two-thirds of wealthy business owners will sell or retire due to a pandemic.
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