April Private Client Tax Newsletter

Focus of IHT Business and Agricultural Property Relief 

It’s less than a year until the proposed changes in Business and Agricultural Property Relief (BPR/APR) come into effect. 

We are already advising our clients on their potential increased exposure to Inheritance Tax (IHT) and most clients are surprised about the impact these rules will have.  

This has resulted in several successful fee generations for the firm but also some valuable advice for our clients. 

Protecting their family business and their farms is a priority as no one knows when their time is due to come to an end. Planning has never been more important. 

Here are some key takeaway facts to help discussions with clients: 

• IHT is sometimes referred to as a voluntary tax: plan effectively to help reduce the tax burden and pass more wealth to family / charities.
• Most business owners will see their exposure increase substantially overnight from 6 April next year – not just tens of thousands but hundreds of thousands!!
• A key point of concern for shareholders who are in their twilight years.
• How will the tax be funded to protect the business and personal assets 
• It is impossible to advise a client effectively without understanding the value of the business – the Corporate Finance team can value the Company to enable the Private Client team to advise. 
• Gifting shares is a potential solution, BUT CONTROL, ASSET PROTECTION and the 7 YEAR SURVIVORSHIP WINDOW are all points that are vital to consider.
• Is a Trust still a good option? – potentially yes, depending on circumstances. It can act as a solution for successive generational planning for grandchildren and remoter issue, those that are still yet to be born. 

 Please note that the proposals are not yet law and so can potentially change between now and when the Finance Bill gets Royal Assent. Despite this, planning ahead is key and it’s therefore important to start those proactive conversations with clients early. 

We are already joining in conversations, arranging meetings and generating fees with Affinia Directors and their clients, so if you wish to introduce a specialist from the Private Client team please do get in contact with Clare Eve.