We believe that getting to know our client’s family is essential to the advice we give for their businesses. Understanding the wider objectives of the family means we can direct our business advice to help ensure the business can provide funding and other opportunities to meet wider family needs and objectives.

Asset protection and trusts

Asset protection and control of investments and businesses are essential to consider for family groupings. Successful parents are often concerned about planning in advance for inheritance tax but they also worry about their children having access to large amounts of capital at a young age. Another common cause for concern is securing the family’s wealth or assets in the event their children have marital or other problems in future.

Trusts are a well proven means of securing family assets and limiting access to them by unwanted outsiders. Trusts can also be very efficient for inheritance tax purposes but the rules are complex and care must be taken when using them. There are various types of trusts; bare trusts, discretionary trusts, interest in possession trusts to name a few and all have their own particular features and tax rules. There are further differences in the tax treatment of trusts when the trust is located outside the UK or if the person contributing assets to the trust or receiving benefits is non-UK domiciled or non-UK tax resident.


There are other simple measures available to manage exposure to inheritance tax in future. Everyone has a tax free allowance of £325,000 against inheritance tax, called a nil rate band. This allowance is not just available on death but can be used every 7 years.

Regular gifts can also be made to protect assets from inheritance tax without having to worry about the donor surviving for 7 years. Gifts out of normal income are often overlooked as an efficient way of managing the exposure to inheritance tax. Put simply, if someone regularly accumulates savings from their unspent income, the excess amounts can be gifted regularly and will escape inheritance tax. Finally, everyone has a small annual allowance of £3,250 that can be used to make gifts, whether or not they are made regularly out of normal income.

It is very important to remember that although gifts can work efficiently for inheritance tax, the income tax and capital gains tax aspects must also be looked at carefully.

Business ownership

Succession planning in the family business is a key area. Shares in a trading company can be gifted from one person to another without adverse capital gains tax consequences and normally without inheritance tax consequences. However, the situation becomes more complex where property or shares in an investment company are involved.

Stewardship of family businesses can be a heavy responsibility and sometimes a phased transition makes sense. Issuing new classes of shares with special or limited rights can be an effective way of transitioning valuable rights in companies from one generation to the next.

If you would like more advice on structuring your business or to discuss business ownership in more detail then please contact us.