Selling Your Business at 55 – Tax Benefits & Pitfalls

Age matters in exit planning

Owners approaching retirement face unique challenges:

• Maximise net proceeds for retirement

• Plan for succession or family transition

• Minimise tax surprises

Selling at 55 is different from selling at 35 — tax rules, allowances, and planning opportunities vary significantly.

1. Key tax advantages for sellers aged 55+

• Freibetrag (tax allowance) often still available

• Partial income method (Teileinkünfteverfahren) applies for private shareholders

• Pension optimisation possible through structuring proceeds via holding or reinvestment

Tip: Combining these levers early maximises the effective net.

2. Common pitfalls

• Overestimating tax-free allowances → surprises at closing

• Ignoring succession rules → family or co-owner conflicts

• Selling too quickly without planning → lower multiple and net proceeds

3. Planning strategies

• Start exit readiness 24 months before selling

• Use holding structures where timing allows

• Optimise tranche sales to spread taxable income

• Coordinate with retirement planning and other personal income

4. Realistic impact on net proceeds

Example (simplified):

• Sale price: €3.0m

• Capital gain: €2.7m

• Using Freibetrag + partial income method → effective tax: ~€500k

• Net to seller: ~€2.2m

Without proper planning, net could be €1.8–1.9m, i.e., ~€300–400k difference.

Conclusion

Selling at 55 is a prime opportunity to optimise both retirement and net proceeds. The difference between planned and unplanned exits can be hundreds of thousands of euros.