A Business Owner's Will

 A person’s Will governs the distribution of their estate on their death. Business assets can form part of a person’s estate. Where business assets are to be included within a Will, we recommend that you consult your accountant to discuss valuations and tax matters.

 Certain tools can be used within a Will, aimed at protecting the longevity of the business owned by the testator.

 We request and review any relevant documents, such as Land Registry title documents in the case of a rental property owned by a limited company, company Articles of Association and any shareholder’s agreement or partnership agreement.

 Effective succession planning when it comes to a business could potentially save time, hassle and money.

 The matter of who the business owner would like to inherit the business should be carefully considered before the drafting of the Will. Is the person they want to inherit the business suited to run the business alone? If not, is there someone that can help them? If the business owner acts as a business mentor to their chosen successor, it is more likely that when their successor inherits the business, they will run it in accordance with the original owner’s business policies and goals.

 The Will of a business owner who is a sole trader or the director of their own company could include a Business Property Relief Discretionary Trust. Where BPR applies, the business assets can be transferred free of Inheritance Tax.

 A Business Property Relief Discretionary Trust is a discretionary trust in the Will that the business assets are placed into, with the aim of preserving the BPR. The Will of a business owner who is married might include this type of Trust. In that case, the Trust will own the business rather than the surviving spouse. Should the business be sold whilst the surviving spouse is alive, the proceeds of sale would belong to the Trust.