Business transfer on retirement: selling a going concern

Spain is facing the largest wave of business retirements in its history. There are 1.1 million family businesses, 89% of the country's companies, generating 67% of private employment and 57.1% of private sector GDP (Instituto de la Empresa Familiar, 2025), and a whole generation of baby boom founders is reaching retirement age. The problem is that only one in three family businesses makes it past the second generation and 70% have no handover plan. For an owner retiring with no clear successor, the alternative to closing down is to transfer the business as a going concern to a third party. This guide explains how to do it properly: preparing the company, valuing it and using the tax rules written for retirement.

What is a business transfer on retirement and how does it differ from succession?

A business transfer on retirement is the sale of a going concern to an outside buyer when the owner steps back and there is no family member to carry it on. It is worth separating it from two similar situations it often gets confused with:

• Generational handover or succession, where the company passes to children or other relatives who keep it going. If that is your route, we set it out step by step in our guide on how to plan the generational handover in a family business.
• The micro-transfer of a small premises, such as a café or a hairdresser's, which is settled with a simple assignment of the lease and the fittings.

What we are talking about here is different: an established SME, with recurring revenue, staff and a client base, changing hands as a full M&A deal. The point is not to hand over a few machines but to pass on a living business while keeping its value and its jobs. That is why the process looks more like selling a company than assigning a lease.

How do you prepare a going concern for sale when you retire?

The easiest company to sell, and the one worth the most, is the one that can run without its owner. A business that depends on the founder to sell, to decide or to hold the key relationships together is hard to transfer, because the buyer knows that value retires with you. Preparing the exit two or three years ahead is what separates a good price from a fire sale at the last minute.

The steps with the most impact on the final valuation are:

• Professionalise the management. Delegating day-to-day running to a team or to a general manager shows that the company operates independently of you.
• Put the accounts in order. Clear financial statements, business accounts kept separate from personal ones and a recurring, demonstrable EBITDA are the first thing any buyer asks about.
• Document processes, clients and suppliers. The knowledge has to sit in the organisation, not only in your head.
• Clear contingencies early. Litigation, tax or employment risks and loosely drafted contracts will cost you price once the buyer finds them in due diligence. Far better to clean them up beforehand.

The other pillar is knowing what the business is really worth. A professional valuation, usually based on EBITDA multiples adjusted for the sector, avoids both asking an unrealistic price and giving away years of work. You can read more on the methods for working out what your company is worth.

What is your company worth today? At Tecnocim we look at your case and prepare both the valuation and the transfer process. Take a look at our business valuation service.

How is the sale of your company taxed when you retire? The life annuity exemption

Selling your company produces a capital gain that is taxed in the savings base of IRPF (Spanish personal income tax). But the rules include an incentive written precisely for people who are retiring: taxpayers over 65 can have that gain treated as exempt if they reinvest the proceeds in a life annuity taken out in their favour. It is the most significant tax break in a retirement transfer, and the one most often left unused.

According to the Spanish Tax Agency (AEAT, 2026), the requirements are:

• Being over 65 at the time of the transfer.
• Taking out the life annuity within six months of the sale.
• The maximum amount whose reinvestment qualifies for the exemption is €240,000.
• The annuity has to be contracted with an insurance company, paid at least annually and without falling by more than 5% a year.

The exemption applies to transfers of shares and of assets used in the business, not only to a home. Above that ceiling, or where the corporate structure suggests it, there are other routes, such as selling through a holding company under the Spanish tax neutrality regime, that are worth looking at case by case. We explain them in our guide on the tax treatment of a company sale and holding companies.

And if instead of selling you would rather gift the company to a relative, the route changes entirely: the 95% reduction under the Impuesto sobre Sucesiones y Donaciones (Spanish inheritance and gift tax) applies, raised to 99% in the Comunidad de Madrid from 1 July 2026, provided the activity is kept up for at least five years.

Sell to a third party, close down or keep the company in the family?

Facing retirement, an owner with no successor has essentially three routes, and choosing well depends on whether the business is profitable, whether it can be transferred and whether there are willing relatives:

Closing down is usually the worst option: it destroys the value built over decades along with the jobs, and it is rarely unavoidable. A profitable business almost always has a buyer, whether another company in the sector, a competitor, a manager who wants to run their own business or a fund; the challenge is finding that buyer and reaching them with the company well prepared, which is what we do in our buyer search service.

Conclusion: a business transfer is something you prepare in good time

Handing over the business of a lifetime cannot be improvised in the year you retire. The earlier you start, professionalising the management, putting the accounts in order and planning the tax position, the more value you keep and the less tax you pay. The difference between a well-prepared transfer and a rushed sale can easily be 30–40% of the final price.

At Tecnocim we support owners through business transfers and company sales: valuation, preparation, buyer search, tax and completion. For transfers of going concerns we also work with camiacasa, specialists in brokering business transfers.

Retiring and want to transfer your company without losing value? Talk to our M&A team and we will look at your case with no obligation. Request advice.