Business and Agricultural Assets
Where clients have business or agricultural assets it is important to consider whether or not they are assets which qualify for business or agricultural relief from Inheritance tax. Where client have assets that do qualify for Inheritance tax relief it is critically important that a business or agricultural clause is incorporated into the will as otherwise the full relief may not be available to claim and so the relief can be partially lost.
We would always recommend that the business or agricultural clause directs the relievable assets into a business or agricultural trust. Thus if after the testators death the assets are sold or lose their tax relievable status they are already held in trust so will not aggregate with any beneficiaries estate and will have all the benefits that a discretionary trust offers.
Where clients own a business with a business partner or other directors, it may not be appropriate or advisable for a surviving spouse or other family members to take on the responsibility of running the business. As such they may wish to consider the use of Cross-Option agreements to be able to ensure that the other directors/business partners have the option to buy their shares in the business. This can give the business the best chance of continuing to thrive after the client’s death whilst still providing for the client’s family.