Putting your business into trust
- Details
- Category: Taking Care of Business: Inheritance Tax and Your Firm
Your business assets need more careful handling than the average Joe's, so take specific legal advice before drawing up a will, or incorporating a trust in your will. Contact your local Chamber of Commerce who may be able to recommend a qualified solicitor with expertise in dealing with business people.
You would put business assets or shares in a business into trust for one of two reasons.
To avoid paying taxes, particularly IHT.
To transfer assets to a beneficiary under controlled conditions.
Business assets are the same as any other asset: If they're put in trust, IHT is reduced or avoided altogether. The ways in which trusts help save tax are explained in Chapters 17 and 18.
Get good legal advice if you're considering putting business assets into trust. Trusts are complex, and businesses are complex, so when you put the two together you get double complexity!
If you put business assets into trust, try to appoint a trustee with experience of running a business.
If the value of the asset you're putting into trust is above the IHT threshold then it may be subject to an initial tax charge of 20 per cent. Check out Chapters 17 and 18 for more.