19/09/2024   Wilkin Chapman - What would happen to your business when you need to hand over the reins?

Jack Newall-Swallow, Probate Solicitor at Wilkin Chapman

When you own a business, whether it’s a care home, or any other business, it is always important to plan for the future. This means making adequate provision to ensure your business can continue to grow, no matter what may happen to you as an individual. 

When thinking about the future, you will need to ensure that your business passes to the people who you wish for it to pass to, and in the right legal structure, to minimise any tax implications. This is why having an adequate Will and Lasting Power of Attorney as part of succession planning is paramount.

When considering your inheritance tax position, there are various allowances which mean you could potentially pass up to £1 million free of inheritance tax. These are, however, subject to specific conditions and are only available to certain individuals. As a care home owner, it is likely your estate will be high value so it is important that you are aware of the potential reliefs available.

Business Property Relief is a tax relief that’s often used when dealing with ownership of businesses to ensure that your estate is inherited as tax efficiently as possible.

It is important for everybody to ensure that their Wills are fit for purpose and are drafted as effectively as possible for inheritance tax and succession planning, but even more so where businesses are involved. We can draft Wills which incorporate trusts to ensure that your business is passed on as efficiently as possible to minimise any tax implications, whilst ensuring that your business’ future is protected.

As a business owner, you will also need to ensure that you have provisions in place in the event you lose capacity or become physically unable to deal with the running of your business. A business Lasting Power of Attorney would enable you to appoint trusted attorneys to make any business decisions on your behalf in the event that you are unable to make them yourself. 

Succession planning ensures your business can continue to grow and will pass down to your intended beneficiaries. We recommend that you seek advice in respect of Wills, Lasting Powers of Attorney and tax planning, even if it is to review your existing arrangements to see if they are suitable. 

Even if inheritance tax is not an issue, it can still be complicated to pass on a business interest to others, especially if Shareholders’ Agreements and Partnership Agreements are involved. We can discuss the best way forward to benefit you, your family as well as protecting your business. 

If you have any questions, please do not hesitate to contact Jack Newall-Swallow on 01472 265985, email [email protected] or visit https://www.wilkinchapman.co.uk/personal/wills-estates-tax-and-trusts

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