Introduction
As a GP partner, there are many reasons why you might want to leave your current role. For example, you could be seeking a better work-life balance or preparing for retirement. Even if you aren’t thinking about leaving just yet, exploring your exit options in advance can help you make good decisions for your future.
A well thought out exit strategy is one that’s good for you, your patients, your partners and your practice. While we recommend giving yourself five or more years to plan, you can still put together a solid strategy in less time if you’re itching to leave your current role.
Forming an exit plan means you can hopefully leave the way you intend, not the way your situation dictates. This could look like reducing your hours as part of a gradual transition or taking a clean break and handing your responsibilities over to a successor.
Create an exit plan
The first step in creating an exit plan is to determine why, when and how you want to leave.
For example, if you’re looking to retire you may want to continue working full-time to build up your savings before you leave at a fixed point in time. Alternatively, you may want to take a phased retirement by letting go of certain responsibilities for a year or two.
Forms and processes
When you’ve decided you want to leave, there are a few processes you must follow. Formally, you’ll need to:
- Remove your name as a partner on your NHS England contract (for GMS & PMS contracts)
- Let the Care Quality Commission (CQC) know you intend to leave (if you’re a registered member)
Informally, you should:
- Let your partners, practice and patients know your plans for your exit
- Check the terms of your partnership agreement and contracts
Understand your partnership agreement
The conditions of your partnership agreement will play a key part in your exit strategy. Things to check include your:
- Notice period (typically between three and twelve months)
- Resignation restrictions (important for choosing your exit date)
- Duties and responsibilities (useful for your handover)
- Premises ownership (if you lease or own your practice)
It’s worth checking for any resignation terms in your agreement, as they could mean you’re unable to retire when you wish. This is typically the case if one of your partners leaves not long before your chosen date.
For example, let’s say you’re in a partnership with two others, and your agreement says you each need to give six months’ notice. On top of that, within six months of one notice being served, nobody else can hand theirs in. In this situation, this would mean you would need an eighteen-month gap between the three leaving dates.
While this is just one example, you could see similar terms if your agreement is drawn up by a solicitor who isn’t a primary care specialist.
Can I change my GP partnership agreement?
Partnership agreements are there to protect the practice, which is why you might find resignation restrictions are included to ensure the partners don’t all leave at once. However, that’s not to say you can’t vary your agreement. You just need to make sure it’s in the best interests of everyone involved.
If your current agreement doesn’t reflect your ideal exit plan, speak to your partners. If you have an exit date in mind or you’d like to take a more gradual transition out of working, communicate this as early as you can.
As long as your practice can continue to run when you’re gone, you should be able to review your partnership agreement and find a way to make it work for the whole team.
If you need help interpreting your partnership agreement or you’re looking for guidance on what you should consider, we can help. Book an appointment with a Specialist Financial Adviser from Wesleyan Financial Services to see how you can future-proof your plans. Advice charges may apply.
Capitalising your assets
When you leave, you’ll want to check the value of the capital held by the practice and see what you’re entitled to take when you leave. This may be covered in your practice agreement.
Selling a GP practice
If you’re the sole owner of a physical premises or you have shares with your GP partner, you’ll need to decide what you’re going to do with the premises.
If the practice is going to continue running when you’re gone, then you may want to sell your share to your GP partner. Steps to take include:
- Checking your partnership agreement for any stipulations around selling
- Getting a formal valuation of the premises and your share
- Understanding any tax implications on the sale
- Ensuring a smooth transition for any patients that might be affected
If you don’t want to sell your share of the property, you could instead retain your ownership and become a landlord for the property. If you’re looking for a clean break from the practice, this might not be the right option for you.
Income and Capital Gains Tax
As you’re responsible for your own personal tax liability, you should factor this into your exit planning.
You’ll likely need to pay income tax on your profits (on top of national insurance) and if you have a physical premises to sell then there may be Capital Gains Tax to pay on your share of the sale. There’s also the annual allowance to consider. This is the maximum amount you can save into a pension each tax year while still receiving tax relief on your contributions.
Your pension and the annual allowance
Typically, the annual allowance is £60,000, but higher-rate taxpayers will get less than this due to tapering.
While you can trigger charges at any time, it’s common during your final working years as a GP partner because of how the NHS Pension is calculated. This is quite complex, but things like the growth on your pension and inflation revaluation can push you over your allowance, meaning you could face an extra tax bill.
If this is a concern, you can ask the NHS Business Services Authority (NHSBSA) for your Annual Allowance Pension Savings Statement. You should always seek advice from your accountant or a tax adviser when it comes to your own tax planning.
If you’d like to learn more, our handy guide explains the annual allowance in relation to the NHS Pension.
Tax treatment depends on your individual circumstances and may be subject to change in the future.
Your post-exit income
If you’re leaving to retire, your exit strategy should align with your overall plans and goals for retirement. One of your key considerations should be around your income, and how you’ll make it last throughout your post-work years.
Ways to take your NHS Pension
It’s likely that your pension will form a large part of your retirement fund. If you’re a member of the NHS Pension Scheme, there are a few ways you can start drawing your benefits to complement your exit strategy.
You should think about when you want to retire, not just the retirement age of your specific pension scheme. Although it’s worth remembering that you need to be 55 or older to start taking your pension.
If you’re retiring before you can take your pension, you’ll need to temporarily depend on an alternative source of income to fund your lifestyle. You can check your specific NHS scheme for your pensionable age.
Flexible retirement options
If you want to start accessing your pension benefits while you continue to work, perhaps to supplement your income as part of a gradual transition, you could retire and return.
You’ll need to take at least a 24-hour break from work which will allow you to access your pension benefits. You can then also continue to make pension contributions to the 2015 scheme.
You’ll also need to consult both your partnership agreement and your General Medical Services (GMS) contract to check your employment terms first, as there may be stipulations around retiring and returning.
Partial retirement
There’s also the option of taking a partial retirement. This could allow you to claim your pension without having to take a break or leave your job. You’ll need to adjust your employment contract, so your pensionable pay decreases by 10%. This can often be achieved by talking to your accountant and figuring out the best way to accomplish this.
If you access your pension benefits before your Normal Pension Age (NPA), your benefits will be reduced as you’re being paid early. You should consider if this option is affordable long-term, as you’ll still have a retirement to fund.
If you’re interested in exploring these options in more detail, you may want to read our guide on partial retirement vs retire and return.
Funding your retirement
On top of your state pension and NHS pension, you may have other retirement income streams. For example, a personal pension, savings or investments.
The value of these, when you can access them and how long they’ll last you should form part of your wider exit strategy and retirement planning.
To learn more, you can read our retirement planning guide for medics.