David acts for an elderly gentleman who was the only shareholder of a trading company which was to be sold for £50 million. David’s advice to the client was to settle one half of the shares in the company, subject to business property relief, into a family trust. The timing was delicate, because for inheritance tax purposes it was not possible to transfer the shares once the binding contract had been agreed. On the other hand, if the company were not then to be sold, and a number of buyers were lined up, then David’s client did not want to put half of the company into trust.
Some delicate negotiations followed as a consequence of which half of the company shares were transferred to a family trust, of which David continues as a Trustee, and business property relief of 100% was obtained.
Happily the client has so far survived for more than 5 years, and so any liability to inheritance tax is rapidly decreasing. As a consequence the family enjoy the benefits of a very significant trust indeed and, with a fair wind, inheritance tax will not be an issue.