Inheritance Tax is a thorny subject for families and can affect couples with more than £650,000 of net wealth between them (2012/13 rates).

 For such couples planning to avoid inheritance tax is never easy because there is a balance to be achieved between maintaining a standard of living through the later years and giving assets to younger generations.

 It is never too early to start planning for IHT mitigation; but typically it would be sensible for the process to begin in the late 50s or 60s.

 It is important to understand that capital gains tax can often hamper planning for IHT and so succession planning in relation to property, shares and businesses is important if this is to be accounted for.

 The first stage of planning is to estimate a family’s current exposure to IHT and if this is material some initial ideas can be suggested. It will become clear to the family which ideas are practical and which are not, and then we can focus on the ones which have a chance of practical success.

For an initial consultation please call Eaves & Co on 0113 2443502 to arrange an appointment. We have much experience in this area of tax planning and testimonials are available on our website.

Top Tax Tips for Owner Managed Businesses
9. Succession Planning
When passing the family company to future generations, it is important to consider the structure adopted to ensure that no unexpected tax liabilities arise on both the outgoing and incoming shareholders.
It may be possible to gift shares to the children in a tax neutral way.  Alternatively a sale of the business to the children through an earn out mechanism could provide a way for the retiring shareholders to withdraw future monies generated from the company at 10%.
Consideration should be given to the income tax, capital gains tax and inheritance tax implications and the benefit of applying for pre transaction clearances from HM Revenue and Customs.