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Structuring the Long-Term Ownership of Family Wealth

Structuring the Long-Term Ownership of Family Wealth

We talked about the important steps anyone looking to sell their business should take before doing so in our previous blog Selling Your Business? What You Need To Know About Pre- And Post-Exit Planning.  But how do you go about structuring your family wealth following the disposal of your business?

Do it correctly and you can achieve both your personal and family objectives, as well as saving significant income tax and mitigating future inheritance tax (“IHT”) liabilities. Following the disposal of a business, careful planning will be required to structure your wealth to maximise its potential. The structure should take account of what you will need to fund your retirement, as well as providing for your family’s future and succeeding generations.

How a family-owned investment company can help structure your wealth

An investment company that holds family investments can be funded and controlled in a way that enables family wealth to accumulate tax efficiently and protected from future IHT liabilities. You can retain control and access the cash needed to fund your retirement, whilst allowing the whole family to work together to set company strategy and build wealth for the future.

What are the tax-saving benefits of a family investment company?

The ownership and funding of the company can be structured so that IHT liabilities are minimised on the disposal proceeds and the growth in the value of investments, whilst still allowing you the flexibility to extract funds for your lifestyle requirements.

By making investments in a company the profits are subject to the lower rates of corporation tax (up to 25%) compared to income tax rates (up to 45%).  In addition, dividends received by a company are usually exempt from corporation tax.  This maximises the value of family wealth.

Getting the right advice: knowing what you have and where you want to be

If you are planning to sell your business or have recently sold it, we can help you maximise your wealth and minimise your tax exposures. We have a lot of experience in saving our clients’ money by helping them structure their wealth in a way that meets their objectives. We can help you understand what you will need for where you want to be and work out the best course of action for your specific circumstances.

Please get in touch to find out more

The team at Creasey’s is here to help you. If you need guidance on how we can help you maximise your wealth and preserve it for future generations, please email Stephen.wiffen@creaseys.co.uk  for more information.