You may (just) have read that Ken had the last laugh on HMRC, by marrying his long term fiancée just before his death. That way, his assets passed to her without Inheritance Tax being paid – whereas up to 40% would have helped the Treasury otherwise.
There are also rumours that some high-profile divorces had at least a hint of tax planning about them.
While I am not advocating marriage or divorce for tax planning purposes, they are important – if delicate – things to take into account when looking at the shares in (for example) family companies. Is there a risk of family wealth being “lost” on divorce? Or, in taxes, on death? So, as well as having up to date wills and Powers of Attorney (and you do have both – don’t you?), you do need to have a think some time about, well, what next?
What will happen to your interest in the company when you want to retire? And, what happens on divorce?
From our perspective at CCW our prime interest is in our client businesses. We don’t pretend to understand the niceties of (for example) divorce law: we have good professional colleagues who we can call on should advice be needed there. But, we can do things to protect family ownership in those unfortunate circumstances, even if we can’t do much about ring-fencing value.
But the purpose of this article isn’t to make you think about the stability of, for example, your children’s relationships. No, it is to make you think. What will happen to the business should the worst happen? Just as you’ll probably have life insurance, you should think of this as “business insurance” and take the steps you can to protect the business.
If you would like to discuss any of the points mentioned above, please get in touch with John Clarke in our Corporate Team