Wills for business owners
Business owners face many burdens and responsibilities. This inevitably includes the question of what you will do with your business once you are no longer able or no longer wish to manage your enterprise.
By speaking with the business property relief succession planning lawyers at Wellers, you can begin taking your first steps towards developing a strategy to protect your interests and those of your family and your business in the event of illness, disability, death or other circumstances. We can assist in turning what once seemed a burden into an opportunity.
A Business Property Relief Will can help you ensure that your business’s property and assets are passed on the way you want, with the lowest possible Inheritance Tax (IHT) liability (potentially 0%) and the minimum level of inconvenience to your business and loved ones.
What is Business Property Relief?
Business Property Relief is an inheritance planning tool for trading businesses. Qualifying businesses can reduce the taxable value of a business property, business interest or other asset at the point it is passed on to a beneficiary. The relief can be provided at a value of either 50% or 100%.
Provided your business is unquoted and you have been the owner of it for two or more years – whether wholly or partially – if you fall into one of the following categories, you may qualify for BPR:
- You are a sole trader
- You are a partner or member of a business
- You are a shareholder
Assets that Qualify for BPR
Although it is called Business Property Relief, BPR can also apply to other business assets belonging to a business, company or partnership. However, the level of relief will depend on the details of the assets being passed on.
The following assets may qualify for 100% BPR:
- A trading business or an interest in a trading business
- Unquoted securities which alone or together with other unquoted shares or securities enable control of an unquoted trading company
- Unquoted shares. This includes shares listed on the Alternative Investment Market (AIM)
The following may qualify for 50% BPR:
- Land or buildings, machinery or plant used largely for the purposes of the business carried on by a company or partnership or sole trader trading enterprise
- Land or buildings, machinery or plant available under a life interest and used in a trading business carried on by the beneficiary
- Quoted shares which give control of the company
Making a Business Property Relief Will
If you wish to make a plan to pass on your company and assets with the minimum level of Inheritance Tax liability, you should contact your commercial lawyer to discuss planning a Business Property Relief Will for IHT purposes.
Doing this at the soonest opportunity can remove the threat of unnecessary tax liability hindering your business and potentially leading to the sale of important assets.
Business Property Relief schemes can seem like difficult processes to contemplate and inevitably they involve the need to plan for the time after your death. You will also need to consider other important related succession planning questions such as establishing Lasting Powers of Attorney to ensure that your business remains in good hands whatever the future may hold.
Far from diluting or weakening your ownership and authority over a business, making a Business Property Relief Will can actually serve to strengthen your interests and ability to influence the future, even after you have died or lost capacity.
Thinking of Selling your Business?
If you are thinking of selling your business, come and discuss the advantages of putting it into a trust before you sell it. This can be used as a mechanism for getting the proceeds of the sale outside of your estate for IHT purposes after seven years whilst enabling you to manage the funds as a trustee on behalf of your beneficiaries for the remainder of your life.
Talk to us
The business succession planning experts at Wellers Law Group can help guide you through the process of making a Will that is tailored to your precise requirements so that you, your family and your business and its assets can be safeguarded on your terms.
Whether you are a partner in a partnership, a sole trader, a member of a family business or own shares in a private company, talk to us today for a discussion about the potential benefits of making a Business Property Relief Will.