Without the correct planning, your business assets are exposed to the following risks:
Inheritance Tax (IHT)
Business relief may well be available on your business assets, but if your spouse, partner, or children decide to subsequently sell the business, the proceeds will enter their estates and incur IHT liability on their death. If this happens, 40% of the value of the business could be lost to future generations.
3rd Party Claims
The share of your business now forms part of your spouse’s/partner’s/children’s estates. It’s therefore at risk from any future divorce settlements, creditors, and bankruptcy.
Cross-Option Agreement
Without a suitable cross-option agreement and trust in place, your share of your business/company that you co-own with a partner/co-director may well be at risk of potential CGT liabilities and future potential IHT liabilities.
Without specialist planning, and the use of appropriate trusts, business and/or agricultural relief could be greatly reduced if not lost completely.
