We enjoy finding solutions to our client’s problems – the “fact find” is nearly always the key to the solution. Once we have our hands on the facts, the solution is an application of our tax knowledge and experience with a bit of “lateral thinking” to find the optimum solution.
The Problem
Mr H, a widower age 86, had significant wealth through majority shareholdings in two family companies, both companies owning residential and commercial property investments together with funds invested by discretionary investment managers. Following the appointment of Wilson Partners as tax advisors, the shareholdings were valued at around £4.0m. When a family home valued at £1.0m was included, the potential Inheritance Tax (IHT) bill facing Mr H’s children was £1.74m. Mr H moved into a care home and £100,000 per annum was required to cover the care home costs. As the companies were not “trading companies”, the valuable Capital Gains Tax (CGT) and IHT reliefs were not available and it was not obvious as to the approach Mr H and his children should take to manage down the exposure to IHT.
The Solution
A detailed “fact find” was carried out including a detailed history of the shareholdings and past activities within the two companies. Forward projections were made of the care home costs for Mr H and how these would be provided. The investments within the companies were re-structured and a family trading activity was introduced into the commercial property owned by one of the companies. Four years after the initial meeting, the shareholdings in both companies met the conditions for the 100% Business Property Relief for IHT. The expected IHT bill for his family will be around £40,000.
The client said:
“Wilson Partners took away all the complexity I had been struggling with and came up with a unique solution for my father which will save my family substantial amounts of tax.”
Click HERE to download case study.
Page reviewed October 2024.
More case studies
Unlocking personal wealth without selling the business
Perhaps most importantly, the shareholders achieved what they initially believed was not possible: unlocking and protecting personal wealth without the need to sell the business. The result is greater financial security, improved long-term planning…
Capital Allowances based tax savings of around £400,000
Following our review, qualifying capital expenditure of over £1.5 million was identified, generating corporation tax savings of approximately £400,000. This has delivered a significant cashflow benefit to the client, providing additional liquidity…
Streamlining revenue transactions and dealing with incomplete records
It was a bigger task than originally anticipated but who doesn’t love a challenge! And such a satisfying feeling to know that the work has paid off and the client is getting more up to date valuable information.