Being able to capitalise fully on the wealth generated by the sale of a business means effectively managing the succession planning both during the sale and once it is completed.
The sort of considerations which occur after disposal can be more intricate, especially when comes to considering the potential liquidity of the seller’s estate.
Together with the advice contained in previous parts of this series of advice articles, it should be reviewed to ensure that awareness of the circumstances, benefits and challenges remain valid and up-to-date.
Reviewing your Will
Once a corporate deal is finalised, there may be changes in circumstances that may impact the seller’s estate.
It is important, therefore, to have given thought to and ideally taken professional advice about how best to maximise reliefs or exemptions and mitigate potential IHT liabilities. Such a process is essential as part of ongoing financial planning to ensure that assets are preserved for current and future generations.
A fundamental part of that process is reviewing documents such as Wills which may already have been establish before, during and after the creation or sale of a business to guarantee that they remain fit for purpose.
It is advisable to review a Will and any supporting documents, such as Letters of Wishes, every three to five years to keep your intentions current as well as being alive to any changes in the law. That is particularly true when it comes to altered business or personal circumstances which could have tax implications.
Engaging other experts
Speaking with financial advisors and legal professionals who specialise in inheritance tax can provide immense peace of mind.
Such discussions are especially useful in ensuring that reliefs such as BPR remain as effective as intended.
More than protecting the transfer of generational wealth, this degree of planning can insulate your business from the prospect of avoidable internal conflict or unnecessary tax liabilities.
Establishing trusts which are relevant to your circumstances – such as a discretionary trust or family investment company (FIC) – offers flexibility in the management of both business and personal assets.
That, in turn, allows for available allowances to be used effectively in mitigating IHT.
Working with an IFA in this regard is crucial to maintaining a solid foundation for your business.
Circumstances both in and out of the office can change. Careful planning or anticipation of what challenges may lie ahead and regular reviews to make sure that planning remains effective is important to protect you, your personal estate and your business.