Family businesses
Advising the business to ensure it thrives as well as meeting the personal needs of the family.
85% of UK businesses are family owned making them the backbone of the UK economy (Institute for Family Business, 2018). However, they are not without their own unique set of challenges. Many of our family businesses are multi-generational therefore managing and nurturing the family relationships is really important, particularly when looking at succession; this is something our team do very well.
Our team provides family business clients with a personalised service ensuring the business thrives as well as meeting the personal needs of the family.
We can help you:
- develop a Family Charter and family governance plan to outline the future direction of the business, the family’s commitment to the business and guidelines for handling conflicts should they arise
- plan and structure your affairs in order to meet the goals of the business taking into account future aspirations
- with your own personal tax affairs and as a business owner, helping you to extract your profits efficiently and prepare for retirement
- bridge the gap between shareholders and your finance team to support the aims of the business
- plan for succession, ensuring the business remains successful for future generations and the wealth of the business owner is protected
- ensure your operational needs are met by providing back office support giving a flexible solution to compliance, accounting and advisory services.
Efficiently moving the family business onto the next generation
Our client is a property based consultancy business established by the father who was retired, with the business now being run by his daughter.
What help did they require?
The father owned all the shares which was a disincentive to his daughter, and any profits would be distributed by dividend to the father. Instead, bonuses were being paid to daughter which was not tax-efficient.
How did we help them?
We restructured the business to move control to the daughter through a tax-efficient share buyout. This enabled the father to claim Entrepreneurs’ Relief, while retaining an income stream from the business. Care was taken to ensure Inheritance Tax would not be an issue. The daughter split her shareholding with her husband, taking advice from local matrimonial and corporate lawyers which we introduced, and is now able to extract profit by way of dividend each year saving thousands of tax.
What did this mean for the client?
The daughter now has a business she can run and grow, and benefit from the actions that she takes. The father, who is retired, does not need to worry about the business any more, but has a secure income stream to support his income in retirement.
Our next step is introducing further key staff into the share structure, through a tax-efficient Employment Management Incentive scheme.
