The Importance of a Very Carefully Drafted Will; the Recession Is Giving Family Owned Businesses the Opportunity to Look Afresh at Succession Planning Issues. John Grundy, an Associate in the Private Client Team at the Birmingham Office of National Law Firm Mills & Reeve LLP, Highlights Those Areas Which Could Benefit from Some Attention

The Birmingham Post (England), June 10, 2010 | Go to article overview

The Importance of a Very Carefully Drafted Will; the Recession Is Giving Family Owned Businesses the Opportunity to Look Afresh at Succession Planning Issues. John Grundy, an Associate in the Private Client Team at the Birmingham Office of National Law Firm Mills & Reeve LLP, Highlights Those Areas Which Could Benefit from Some Attention


Byline: John Grundy

Downturn or no downturn, there are certain basics a family-run business needs to get right in terms of succession planning.

To protect the interests in a business, and to ensure the right people get to benefit from them, it is fundamental that the business owner makes a will. A well drafted will can save inheritance tax (IHT) and preserve the funds for the intended recipients. Similarly, any death benefits accruing from life or pension policies should be directed on death into a trust so they can benefit from reduced IHT.

These are the nuts and bolts of succession planning. However, the recession has brought other strategies into focus.

If the value of a business has fallen, it will undoubtedly feel like bad news. However, one advantage is that shares gifted will attract less Capital Gains Tax (CGT), due to their reduced value. What's more, shares in trading businesses benefit from lower rates of CGT, since they are classed as business assets.

From an IHT perspective, such shares passed on to a child may be eligible to business property relief, which means they could even pass tax free on the death of the owner.

An alternative, and possibly better solution, is to gift the shares into a trust rather than pass them on outright. This enables CGT to be postponed. It provides protection in the event of a divorce or financial claims. It also allows the individual gifting the shares to retain control over them during their lifetime by acting as trustee. Finally, if the business is sold, the resulting cash is outside the beneficiary's estate for the purposes of IHT.

If the recession is leaving you with a little more time on your hands it is perhaps opportune to look at other business structure issues as well. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Importance of a Very Carefully Drafted Will; the Recession Is Giving Family Owned Businesses the Opportunity to Look Afresh at Succession Planning Issues. John Grundy, an Associate in the Private Client Team at the Birmingham Office of National Law Firm Mills & Reeve LLP, Highlights Those Areas Which Could Benefit from Some Attention
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.