We have a client who was keen to make provision for his children and grandchildren, whilst retaining control over assets in his business.
On reviewing the company accounts, it was clear that the cash balances looked set to escalate over the coming years, potentially to an excessive level. This needed addressing to prevent any potential restrictions to the availability of Entrepreneurs’ Relief (ER) on the disposal of shares, and Business Property Relief (BPR) in the event of his death.
A reorganisation of the company share capital was undertaken. We also used this opportunity to enter into trust planning to protect the underlying assets whilst making provision for the shareholder’s family.
Advice was also provided in respect of the cash and how this could be employed within the business, rather than allowing it to accumulate with no purpose.
By undertaking this planning, the client has achieved the following outcomes:
- He is able to provide income to his children and grandchildren, during his lifetime.
- Steps have been taken to protect availability of ER and BPR.
- The company cash is being used for business purposes, as well as being extracted in a way which benefits the whole family.