B
Ben
Scenario is as follows:
Net Value of Estate £450K. Donor and spouse aged 65 and 60
respectively and are preparing to claim state pension. No asset
transfers have taken place whatsoever. The donor and spouse have adult
children: a son and two daughters. The son has taken an active
interest in the family affairs and the daughters are married and
independent.
Donor traded 31 yrs, as sole trader from freehold commercial property
part of which is his main residence. (Accommodation above shop).
Property has a single deed hence no split of deeds between residential
to commercial has taken place.
5 years ago Donor ceased trading and commercial portion of building
including all business assets was let on 1 yearly renewable licences
(i.e. held control of fixtures, fittings and equipment though ceased
trading). Donor, subsequent to ceasing trade, travelled to and fro
from UK leaving spouse to collect rental Income. The 3rd licensee left
the commercial property few moths ago and the Donors son took over the
premises under the same conditions trading as a private limited
company and paying rent to mother (Donors spouse).
Taking into consideration the following:
The nil rate band, Business Property Relief, inter spouse exemptions
satisfying IHT regulations - Taper Relief and holdover relief under
CGT regulations. The age of the donor and spouse and the fact that the
donor had ceased trading but has not disposed business assets and
further the availability of the son as heir and the sons current
business activity trading as a limited company under a license in the
fathers property.
What is the best way forward in order to keep IHT and CGT liabilities
minimised if not nil.
Net Value of Estate £450K. Donor and spouse aged 65 and 60
respectively and are preparing to claim state pension. No asset
transfers have taken place whatsoever. The donor and spouse have adult
children: a son and two daughters. The son has taken an active
interest in the family affairs and the daughters are married and
independent.
Donor traded 31 yrs, as sole trader from freehold commercial property
part of which is his main residence. (Accommodation above shop).
Property has a single deed hence no split of deeds between residential
to commercial has taken place.
5 years ago Donor ceased trading and commercial portion of building
including all business assets was let on 1 yearly renewable licences
(i.e. held control of fixtures, fittings and equipment though ceased
trading). Donor, subsequent to ceasing trade, travelled to and fro
from UK leaving spouse to collect rental Income. The 3rd licensee left
the commercial property few moths ago and the Donors son took over the
premises under the same conditions trading as a private limited
company and paying rent to mother (Donors spouse).
Taking into consideration the following:
The nil rate band, Business Property Relief, inter spouse exemptions
satisfying IHT regulations - Taper Relief and holdover relief under
CGT regulations. The age of the donor and spouse and the fact that the
donor had ceased trading but has not disposed business assets and
further the availability of the son as heir and the sons current
business activity trading as a limited company under a license in the
fathers property.
What is the best way forward in order to keep IHT and CGT liabilities
minimised if not nil.