protecting the family business
the challenge:
A business with a national brand, owned by a family of
shareholders, had three concerns: dealing with the potential for
inheritance tax (IHT) on the death of any of the major shareholders
in the future, putting a succession plan in place for running the
business and protecting it from dilution as shares are passed down
the generations.
our approach:
We discussed their concerns with them and advised the two senior
generations to put the bulk of their shares into trust. While
the grandparents could not benefit from this arrangement the
parents and future generations could. This allows the family
to continue to control the shares, through their appointment as
trustees, and protects them against the potential imprudence or
misfortune of future generations with the family’s main asset.
the result:
The transfer of shares into trust secured valuable business relief
from IHT and capital gains tax; the appropriate family members are
continuing to run the business and the shares are protected from
future IHT whether the business is retained or sold.