What Is Business Property Relief?

Inheritance tax is often named as one of the UK’s most hated taxes. While there are a number of ways to reduce your eventual tax bill, many people are unaware of business property relief.

Business property relief allows relief from inheritance tax at a rate of 50% or 100% on certain business assets.

You can get 100% business relief on a business or interest in a business, while 50% relief is available on:

  • shares controlling more than 50% of the voting rights in a listed company;
  • land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled;
  • land, buildings or machinery used in the business and held in a Trust that it has the right to benefit from.

It’s important to remember that you can only get this relief if the person who has died owned the business or asset for at least two years before they passed away. You also can’t claim business relief if the asset is not needed for future use in the business.

What’s more, business assets can actually be given away while the owner is still alive and qualify for business relief. However, certain criteria needs to be met – for example, the recipient must keep them as a going concern until the death of the donor.

Clearly, timing is extremely important when it comes to business property relief, so plans should ensure it’s available at the relevant time.

Business property relief can make a huge difference to the eventual inheritance tax bill of your loved ones and can also help with succession planning. But it requires careful planning in order to ensure it is available when you need it. Dictating exactly what happens to your assets after you die is incredibly important, whether you own a business or not, and a Will is the best way to do that. It is a terrific way to reduce the uncertainty and upset your loved ones face after you pass away.”

If you own a business or are interested in becoming a business owner, and would like advice on how to include this within your Will, talk to Finance North Estate Planning Services today on 0161 771 2056 or email help@FinanceNorthEPS.co.uk.

Finance North Estate Planning Services
Cheshire Office – 0161 771 2056
Staffordshire Office 01782 963 303

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“Simply Good Business Sense”

If you are a business owner, director, partner or a sole trader, protecting the future of your business with a Lasting Power of Attorney is simply a must!

What is a Business Lasting Power of Attorney

 A BLPA is a powerful legal document which allows a Business Owner (Donor) to appoint persons of their own choice (Attorneys), to look after their business affairs. It can be used if they no longer wish to make these decisions, or lack the capacity to manage their business affairs themselves.

 Why do I need a BLPA?

The main objective of any Sole Trader, Partner or Company Director is to ensure the efficient running of their business. With daily decisions to be made, staff to pay and suppliers to meet, it is imperative that somebody is able to fulfil their duties if they should be taken ill or become mentally incapable.

If you can’t continue to run your business, either through being physically or mentally incapable, (or by simply being out of the country for long periods of time) it is important that somebody has the authority to act on your behalf in relation to your business interests.

  • Salaries
    Bank accounts may not be accessible. Salaries and bonuses could therefore go unpaid; this may cause undue hardship for the employees and their families.
  • Suppliers
    With a signatory unable to sign on the business bank accounts, suppliers may not be paid and cash withdrawn therefore suppliers are left without payment and refuse to send further products.
  • Contracts
    Without your signature, the business could be prevented from entering new contracts, paying invoices, buying stock and authorising sales.
  • Banks
    Most banks place limitations on accounts when they become aware that an    account holder has lost capacity.
  • HMRC
    Without your signature, the business may not be able to pay its creditors as above, this could include HMRC.

Won’t my business partner/family member(s) be able to just run things for me?

You may think that your family, friends, or business partners can help run the company if anything should happen to you. Unfortunately this may not be the case. Without a BLPA it would be for the Court of Protection to decide who is best placed to make decisions on your behalf. This process can take months and be very costly, in the meantime your business may struggle to survive.

It will be the Court of Protection who decides who the best person to deal with your affairs is. What happens if that person is not business minded, or doesn’t work well with the remaining business partners? Would you, or your business partner, want the business being run by a stranger?

A Business Lasting Power of Attorney is a simple, cost effective legal document that allows you to choose the best person to run your business.

A Business Lasting Power of Attorney only comes into force when it is needed. It should be safely stored away and registered in the event of a critical illness or accident. It can even be used in the event of a lesser injury which temporarily prevents someone from dealing with their business affairs.

How we can help?

Having to face the prospect of being unable to deal with your own business affairs can be daunting for us all, but failing to act NOW and plan for this eventuality can lead to your business suffering unduly.

We understand that the process of dealing with the business affairs of someone who has lost capacity can be very difficult. Our dedicated team of professionals have vast experience in dealing with both the Office of the Public Guardian and the Court of Protection and provide both a professional yet personal service throughout, while still offering our clients extremely competitive rates.

Speak to our team today at Finance North Estate Planning Services, call 0161 771 2056 or complete the form below and one of our consultants will contact you to discuss your requirments.

Finance North Estate Planning Services
Offices in Cheshire & Stoke on Trent