A business sale changes a client's income evidence, their estate and their pension options at once. What it does to the mortgage, what it does to the planning, and why the introduction is best made before completion.
A client who sells a business loses the income that supported their borrowing. A lender assessing a new mortgage will want evidence of income from employment, a new business, pensions or investments. Sale proceeds are capital and are not counted as income.
Payment for a business is sometimes spread over time through deferred consideration or an earn-out. Lenders treat these payments with caution, because they depend on the buyer and the business's later performance. Where a client plans to move or remortgage around a sale, set out what lenders will accept and when.
Shares in an unlisted trading company can qualify for business relief from inheritance tax. Since 6 April 2026, full relief applies up to an allowance, with relief at a lower rate above it. Once the shares are sold, the proceeds are cash and the relief no longer applies.
A client whose estate was largely sheltered by business relief can find, on completion of the sale, that it is fully exposed. Estate planning for the proceeds is one of the first questions a planner will look at.
Capital gains tax on the sale, and whether Business Asset Disposal Relief applies, is a question for the client's accountant or tax adviser. The structure of the sale and the timing of payments affect the tax, and those decisions are taken before completion.
Your part is to know the timetable. If the client plans to buy a home, remortgage or release equity around the sale, the lending has to fit the dates of completion and of any deferred payments. Ask the client to tell you as soon as the dates are fixed, and agree with the accountant which figures the lender will see.
Tax relief on personal pension contributions is limited to the client's relevant UK earnings in the tax year. Sale proceeds are not earnings. A client who expects to put a large share of the proceeds into a pension with tax relief may find they cannot.
Employer contributions from the company before the sale work differently, and can be considerable within the annual allowance and carry forward rules. The timing matters, which is why the planning conversation belongs before completion.
A client with sale proceeds can clear their mortgage. Whether they should depends on their income after the sale, their other plans, the cost of the mortgage and how the cash would otherwise be invested. That comparison is investment and planning advice.
The mortgage side is yours: early repayment charges, the overpayment allowance, and whether the lender would allow the client to keep a smaller loan. Give the client and their planner those figures.
Sale proceeds can sit in a bank account for months while the client decides what to do. Deposit protection under the Financial Services Compensation Scheme has a limit per person per banking licence, and large balances can exceed it. A client with a large balance may want to know about that limit while they decide.
What to do with the money is investment advice. Tell the client the protection limit exists and offer an introduction.
If the client plans to use part of the proceeds for a purchase or to clear the mortgage, agree the timing with them so the money is available on the day without being moved in a hurry.
A director who sells their business loses any key person cover, relevant life cover or group death-in-service benefit that came with it. Their household's protection may now rest on personal policies alone. Review it with the client once the sale completes, within your permissions.
If the client stays on under the new owner for a period, find out what benefits the new employer provides and for how long.
the mortgage, the lending evidence after the sale and the client's personal protection.
capital gains tax, Business Asset Disposal Relief and the structure of the sale.
the sale agreement and the client's will.
the proceeds, pensions and the estate, working with the accountant.
The best time is before the sale completes. The client's accountant and solicitor are working on the deal, and a planner can work alongside them on pensions, the estate and what happens to the proceeds.
You may hear about a planned sale on a remortgage or a product transfer. Note it, and make the offer once: "Selling the business will change your income, your pension options and your estate. Those are questions I do not advise on. A planner at Equity & General works with business owners and their accountants on these questions, and involving them before completion leaves more options open."
Yes, lenders accept sale proceeds as a deposit with evidence of the sale and the funds. For affordability, the lender will want evidence of the client's income after the sale.
You can give them the figures, including any early repayment charge. Whether to use the proceeds to clear the mortgage is investment and planning advice, and E&G gives it.
The introduction still helps. The planner can advise on investing the proceeds, pensions within the rules that apply and the estate.
A retirement interest-only mortgage is assessed on pension income and repaid from the estate. Why that puts the client's pensions and estate in the same decision as the loan, and how to run both pieces of advice.
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How a Lifetime ISA works on a first purchase, the timing and price limits that catch buyers out, and the savings and pension questions that follow the keys.
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A director's mortgage rests on the company's profits. The key person, shareholder and relevant life cover you can advise on, and the shares, estate and pension questions that belong with a planner.
Read itYour firm keeps the mortgage and protection advice. Equity & General gives the pension, investment and estate planning advice, and a named partnership manager sets the arrangement up with you.