Hi,
Myself and my wife have been property developers for a few years now under a ltd company which is structured to give both of us a total share value of 100%. The company only buys and sells property, no assets are currently being held for long term gains so to make sure the business qualifies for BPR should anything happen to us, as we have children. I thought this would be the right move to avoid IHT and keep the money + sellable assets in the company to pass on to the children so the business could continue past our grave or the funds be used towards another venture with the children at the helm. However there's a lot I've not understood about the tax planning side of things and i have a few questions if anyone with the right knowledge is kind enough to shed some light?
- If I'm right in what I've read then on the death of all directors the company is put in to a trust until the beneficiaries are old enough to be appointed directors as per the instructions of the will. If this is correct, does a trust need to have been set up prior to the directors deaths in accordance with the will or is this something that automatically happens? If it's something that needs to be done prior should the trust be placed as a shareholder within the company?
- Would the trustee of this trust have any powers over the company itself that could potentially harm the outcome for the beneficiaries?
- Do HMRC resume taxation of the company when the new director(s) are appointed and the trust dissolved, or is there some strange law which allows them to dip in to the pot year by year?
- Can the companies article of association be amended to pass on directorship to the children when they come of age, in case of scenarios where there is no existing will? If not should there still be something in the article mentioning their names so to speak?
- More of a companies house question but can a director/share holder be given only voting rights and no rights to the actual capital in pre planning for scenarios where the main directors suddenly die?
I really appreciate anyone who can can help on this.
All the best
Myself and my wife have been property developers for a few years now under a ltd company which is structured to give both of us a total share value of 100%. The company only buys and sells property, no assets are currently being held for long term gains so to make sure the business qualifies for BPR should anything happen to us, as we have children. I thought this would be the right move to avoid IHT and keep the money + sellable assets in the company to pass on to the children so the business could continue past our grave or the funds be used towards another venture with the children at the helm. However there's a lot I've not understood about the tax planning side of things and i have a few questions if anyone with the right knowledge is kind enough to shed some light?
- If I'm right in what I've read then on the death of all directors the company is put in to a trust until the beneficiaries are old enough to be appointed directors as per the instructions of the will. If this is correct, does a trust need to have been set up prior to the directors deaths in accordance with the will or is this something that automatically happens? If it's something that needs to be done prior should the trust be placed as a shareholder within the company?
- Would the trustee of this trust have any powers over the company itself that could potentially harm the outcome for the beneficiaries?
- Do HMRC resume taxation of the company when the new director(s) are appointed and the trust dissolved, or is there some strange law which allows them to dip in to the pot year by year?
- Can the companies article of association be amended to pass on directorship to the children when they come of age, in case of scenarios where there is no existing will? If not should there still be something in the article mentioning their names so to speak?
- More of a companies house question but can a director/share holder be given only voting rights and no rights to the actual capital in pre planning for scenarios where the main directors suddenly die?
I really appreciate anyone who can can help on this.
All the best