Solon Legal Services Ltd advise business shareholders, partners and proprietors about fair value, pre-emption and preserving business property relief (BPR) from inheritance tax.

In the absence of a business shareholder agreement we will check the company articles and memorandum, also any cross options agreements and the ownership details of associated property and determine what would actually happen if an owner or shareholder died.

General partnerships may have a partnership agreement or by default the Partnership Act 1890. Different rules apply for LLP’s or Limited Partnerships.

Often owners or shareholders are so busy with the day-to-day running of their businesses that they have little in place for their exit strategy and particularly so if they or one of their business associates were to die unexpectedly.

Potential Issues

The first problem with business assets is to ensure that in the event of someone’s death that a fair value for their stake can actually be extracted from the business and delivered into their estate. Problems associated with achieving this are;

A minority shareholding even in a successful business is often of little value on the open market.

The remaining shareholders often have sufficient voting powers to control the business without needing the co-operation of whoever inherits the shares.

Once we have considered how, in the event of a stake holders death, their interest in a business really does end up delivering some value to their beneficiaries, then we can look at trusts or other strategies to make the best possible use of business property relief in transferring business assets or cash generated by disposing of the assets to your chosen beneficiaries without them paying unnecessary inheritance tax.

Whether or not your business or agricultural holdings qualify for relief from IHT will depend upon factors such as how long you have owned them and the nature of the business.

Having owned and managed several businesses and being a family man John Welsby is well placed to understand the needs of shareholders, partners and directors both as members of a business team and as individuals with their own families and personal priorities and interests.

How It Works?

We visit you without obligation and clarify what happens under your current arrangements if you or one of your business associates dies. What happens as far as the bereaved family are concerned and also the consequences for the remaining business associates.

We then discuss what strategies are available to improve this situation.

Either as a group or on a one to one basis we can then consider other issues such as what happens if a shareholder loses mental capacity or how the personal circumstances of an individual cause different estate planning measures to be appropriate.

Next Steps

If you wish to proceed with particular actions or require a written report these can be instructed on a fixed fee basis quoted in advance.