Exit strategy

An exit strategy is the plan for how and when an investment will be realised, decided before the investment is made rather than when circumstances force it.

Why it belongs at the start

The exit determines the structure, the tax position, and often whether the deal makes sense at all:

• Bright-line — a sale within two years is taxable, so a short intended hold changes the maths
• Ownership structure should reflect how you intend to exit
• Break fees on fixed lending can be substantial on an unplanned sale
• Selling costs need to be in the original model
• Depreciation recovery on chattels can arise on sale

The main exit routes

• Sell on the open market
• Sell to another member or investor
• Refinance and hold — releasing equity rather than selling
• Transfer within the family or to a trust (which can itself be a disposal for tax)
• For a JV or syndicate, a defined buyout mechanism

Common misunderstanding

"I'll hold forever" is not an exit strategy, because circumstances change — relationship, health, employment, lending conditions. The question is not whether you intend to sell, but what happens if you have to.

Forced exits produce the worst prices. The whole point of planning it is to avoid selling on someone else's timetable.

Related terms

Last reviewed: 1 August 2026 · General information only, not financial advice.

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