The unprecedented pressures on General Practice combined with the age profile of the profession are creating a wave of partner retirements. What should you be thinking of before drawing your pension and booking your extended holiday in the sun?
The first concern should be the transfer of the NHS contract. A GMS contract can only be transferred to the continuing partners through a Partnership Agreement, so if there is not a valid Partnership Agreement in place at the retirement date there is a risk that NHS England will not be able to transfer the GMS contract. A PMS contract can only be transferred with the consent of all parties, so NHS England will have to agree to this in writing, and they are able to refuse regardless of anything written in a Partnership Agreement. If you remain named on a primary care contract after retirement you may find yourself held responsible for its delivery.
If you are planning a ’24 hour retirement’ you will need to ensure that you are able to both come off the contract and come back onto it again afterwards. This will require a carefully drafted Partnership Agreement and, in the case of a PMS contract, the consent of NHS England.
The surgery is usually the next biggest issue. A freehold surgery will probably need refinancing, and a lease will need transferring. Both transactions can be time consuming and give rise to problems as they require the consent of the bank or the landlord. This may not be forthcoming unless you are able to find an acceptable replacement partner to take over your obligations. An option being explored by many practices is a sale and leaseback, but these transactions take time and are not suitable for everyone. Legal assistance should always be sought for any transfer of property, and early planning is vital to minimise the tax implications of the transaction.
Remember to always get a professional valuation of a freehold disposal to avoid any allegations of a sale of goodwill, and ensure your name is removed from the land registry and any property ownership deeds/declaration of trust.
If you and your partners own any other valuable assets you may well also need to transfer these. This might typically include shares in a GP Federation or an interest in a pharmacy. These will need to be valued in accordance with your Shareholders Agreement, and finance may need to be raised to buy you out. You will then need to sign a stock transfer form.
Next you will want to instruct your accountant to draw up a final set of accounts, and take particular care around the cut-off used for annual payments such as QOF which should normally be spread equally over the year. You will also want to ensure that you have agreed who is liable for settling debts (or collecting credits such as superannuation overpayments) which fall due after your departure.
Last but not least you should ensure that you are no longer ‘held out’ as a partner by coming off the Bank mandate, the website, the letterhead and the nameplate, and you may want to seek an indemnity from the ongoing partners against any future problems being attributed to you.
Once you have made sure that any other Partnership Agreement obligations are complied with (such as for example transferring appointments where possible), you can return the keys, attend the retirement party, and bid a final farewell to patients and colleagues.