Looking to safeguard your business?
Feb 16, 2016
There are a number of ways to safeguard your family business as you grow older. One of the first and probably most important things to do is to make a Power of Attorney. This ensures that if you lack the capacity to make decisions for yourself and run the business, your attorney can step in and deal with the financial aspects of the business on your behalf.
It is also important to implement effective tax planning in your Will if you own a business. This should help to protect your investments and pass the business on to your family after you die. By using trusts, you can limit your exposure to inheritance tax and ensure that your ideas around succession planning can be executed.
There are a large number of options you could consider and some of them can be implemented before you die, which makes succession planning for your business even easier. One of which may be placing business assets in trust.
A trust is a formal agreement to manage an asset, whether money, land, investments or property for named people. There are a number of people involved in setting up a trust – the person who puts their assets into the trust is the settlor, the person who is named in the trust to benefit is the beneficiary and the trustee is the person who manages the trust. The trustees are the legal owners of the trust and they must ensure that they apply the trust as per the settlor’s wishes and these will be set up in a deed document.
By splitting out assets into trusts there can be benefits in Inheritance Tax exposure, but you should also be aware of some of the risks of exposure to other types of tax such as Capital Gains Tax or Stamp Duty Land Tax.
The majority of business assets will attract something known as Business Property Relief and are exempt from Inheritance Tax. It is therefore essential that you take good legal advice regarding this point and more often than not, this is discussed when you make your Will. Making your Will and putting in place a Lasting Power of Attorney will ensure that you and your family are properly protected.
If you would like advice on trusts, Wills or Lasting Powers of Attorney then please do get in touch. You can call us on 01264 353411, contact us online or email us at firstname.lastname@example.org and we will happily help you.
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