Working with family solicitors to establish shareholders agreements or partnership agreements which safeguard the asset from Inheritance tax, whilst planning on how the asset will be passed to the next generation whether during lifetime or on death. Considering the impact on any loan security.
Dairy Farming Client
Advised a client’s solicitor on the passing of assets through a deed of variation on an deceased estate and the issues surrounding Stamp Duty. It was felt that Stamp Duty was due on the deed of variation through the release of the debt on the deceased’s wife. In my opinion there was no benefit, as the debt was owned by the partnership which was passing to the son whereas the farm was passing to the deceased wife who wasn’t a partner. As the wife had no liability to the bank she was gaining anything on passing the asset to her son.
A farming client had a diversified property portfolio and due to the other income threshold was into higher rates of tax, by looking at their business structure, I advised that we could incorporate the business by using incorporation relief, we were able to maximise the value of the properties into the Limited Company, transfer any gain into the shares and as we’d already set up a partnership business for the letting there was no stamp duty. The client was able to use the saving in tax to service loans and re-invest.
Client’s mother had intended to pass land to her son, he subsequently on this belief built a house, however unfortunately the actual land conveyance never got dealt with. The Solicitor acting for the family wanted to bring into the estate the value of the land as being owned by the deceased, the consequences of this would have been a significant charge to inheritance tax. I successfully argued that the beneficial interest had passed at the time the son applied for planning permission, which had passed the 7-year rule. The client’s mother had written to the solicitor asking for them to transfer the land, she was of sound mind and understood what she was doing. She had clearly got the intention of making the land a gift to her son and the son had accepted the gift by apply for planning etc.
Assisted clients with Will planning, using discretionary trusts to safe guard from inheritance tax on the first death of a spouse and understanding HMRC’s view of the claim to APR (Agricultural property relief) or BPR (business property relief). This is particularly helpful when an estate or farm has diversification and a claim for BPR is key.
Capital gains tax planning – saved a client £800k in capital gains tax by establishing planning to claim the Entrepreneur’s relief the 10% tax rate. Planning consisted looking at the relevant business structure, ensuring the trade was correctly established with the consultant and successfully arguing with HMRC over the intention of the land. The enquiry closed and the client saved the tax.